A Few Questions for My Austrian Readers

Posted on Tuesday, April 28, 2009 at 11:13 am

scott_sumner.jpgScott Sumner: As you know I am completely contemptuous of those (mostly Keynesians) who use interest rates as an indicator of monetary policy.  Interest rates were very low in American in 1931; and very high in Germany in 1923.  I believe that interest rates tell us precisely nothing about whether money is too easy or too tight, especially short term rates.  The key variable is NGDP growth (which I believe Hayek also favored targeting.)  Do you agree with my view that the 1% (short term) interest rates of 2003 were a totally meaningless indicator of the stance of monetary policy? See here.