Must-Read: Mariana Garcia Schmidt and Michael Woodford: Are Low Interest Rates Deflationary? [No:] A Paradox of Perfect-Foresight Analysis: “Some… suggest that prolonged low nominal interest rates… …and central-bank promises to maintain such policy–may bring about lower inflation (rather than higher)…. The “Neo-Fisherian” View (Cochrane, 2015b)…. Is it really true that “modern theory” — deriving aggregate … Continue reading Must-Read: Mariana Garcia Schmidt and Michael Woodford: Are Low Interest Rates Deflationary? [No:] A Paradox of Perfect-Foresight Analysis