Re: Can the Fed set the long-rate?

[Randy Wray <lwray@xxxxxx>]

doug
the fed wanted to try to "fine tune" the economy thru countercyclical
interest rate adjustments, thus, abandoned the "peg".

by the way, i don't think chris's "interest rate risk" can explain the
term structure as it still requires expectation that rising interest
rates are more likely than falling.

also, depends on "widows and orphans" dominating, rather than
"speculators".
randy wray
>
> Paul Davidson, you often cite WW II control of the bond rate as evidence
> that it can be done in peacetime. To what do you attribute the ending of
> the wartime controls? If your policy were so reasonable, why was it
> rejected?
>
> Doug
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