Over the last three years, a quiet rebellion seems to have sprung up in macroeconomic circles. So far, it's limited to a few whispers, a couple of papers, and the odd blog post or dinner speech, but it represents a striking break from conventional thinking. And despite my best efforts, I find myself unable to convince myself that it's wrong. The rebellious idea - which I've decided to call "Neo-Fisherite" - is that low interest rates cause deflation, and high interest rates cause inflation. First, the basic idea. The Fisher Relation says that nominal interest rates are the sum of real interest rates and inflation: ... (full story)