Re: Starting Point

[Warren Mosler <mosler@xxxxxxxxxxxxxx>]

>
> If we are talking about a flat yield curve dead on
> zero (!?),

For the 'risk free rate' pretty much yes.  All
that needs to be done is for the reserve bank to
announce that the support rate and overnight interbank
will be 0 bid, and that policy will be in force
by law for 30 years, for example.

Credit spreads, etc. can then take it from there.

With a floating exchange rate policy your below
concerns are not directly applicable.

warren

 or at least a yield curve with too little
> income in it to yield a surplus to banks from which
> they can recapitalise, it seems like somebody
> somewhere is trying to push on a string.  I still
> think of a simplistic IS-BP curve with the IS curve
> hitting the axis to the left of the position of full
> employment.
>
>
>
> --
> Dr. Bruce R. McFarling
> Lecturer in Economics & International Business
> Newcastle Graduate School of Business
> University of Newcastle
> Callaghan NSW 2308
> (02) 4921 7962 (W, voicemail)
> (02) 4921 7398 (FAX)
>
>
>
>


=====
http://www.mosler.org
      http://www.moslerauto.com

Primary email contact:  wmosler@xxxxxxxxxx

__________________________________________________
Do you Yahoo!?
Yahoo! Platinum - Watch CBS' NCAA March Madness, live on your desktop!
http://platinum.yahoo.com