Showing posts from November, 2017

Lonergan Stops Rogoff Extremism with Dual Interest Rates

This article was first published by me on Talkmarkets: Eric Lonergan, who is credited along with Adair Turner and a few others for keeping the Milton Friedman idea of helicopter money alive, has fascinating views about interest rates. Lonergan takes issue specifically with Kenneth Rogoff, but this concept he courts can be applied to Fed behavior, the ECB, the BOE, and the BOJ. When I first discussed ECB helicopter loans on Talkmarkets, I emphasized the perpetual aspect of TRTLO's. But what also is important in Lonergan's vision is that dual interest rates makes it all work.  What Lonergan is saying is that there are different interest rates. He says that the obvious way to stimulate an economy is to use dual interest rates. Lonergan rejects the Rogoff concept of only allowing  negative deposit interest rates that would also force a need for