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Re: Interest Rates, Inflation, Exchange Rates and Credit in Bull And Bear Markets

Chris,
You forgot to read me post before responding.
As Is said: ``The point made by some
structuralists---that higher interest rates work
as a negative supply shock---is quite different:
it is not a source of sustained inflation.''
Sheesh. You might want to take a look at my
article as well.
Alan


On Fri, 1 Dec 2000, Chris Niggle wrote:
> Since interest rates are a cost of production, higher rates could
> lead to "cost push" inflation.  Second, the CPI calculation includes
> the cost of housing, which includes the interest rate cost of
> servicing mortgages.  See Randy Wray and Papadimitriou's Levy
> Institute publications on inflation.
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