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Rethinking Keynesian Theory: Debunking Interest Rates and Inflation Myths
In the realm of macroeconomics, a legion of PhD economists in central banks passionately contends that interest rates are a pivotal policy tool for managing the economy. Simultaneously, these economists firmly uphold that the Consumer Price Index (CPI) is an accurate gauge for measuring inflation—a widespread acceptance of this CPI as a valuable metric. The current theoretical state of macroeconomics should be classified as negative knowledge, akin to asserting that the earth is flat. One should have a better understanding of macroeconomics before delving into the topic. John Maynard Keynes is to blame for this ... (full story)