Rethinking Keynesian Theory: Debunking Interest Rates and Inflation Myths
By Frank Hollenbeck In the realm of macroeconomics, a legion of Ph.D. economists in central banks passionately contends that interest rates are a pivotal policy tool for managing the economy. Simultaneously, these economists firmly uphold that the Consumer Price Index (CPI) is an accurate gauge for measuring inflation—a widespread acceptance of this CPI as a valuable metric.
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