Confused about the theory of how interest rates can affect economic growth? Senior Editor Paddy Hirsch is here with a handy analogy.
Maybe (please) Mr. Hirsch can tackle the explanation of bond yield spreads being a predictor of future inflation?
Always enjoy your videos! I would like to see a video on the commodity markets, and how the current economic crisis has affected them.
After linknig your exmaple to the current situation, you should've used it was a segue to explain what the liquidity trap is and the danger of deflation.
It's a shame you didn't.
I enjoy Mr. Hirsch's video clips but found this one slightly over simplified. Mr. Hirsch only described interest rates in regards to personal savings. What about interest rates in regards to the availability of money. When the federal funds rate is low, it is easy for banks to lend to each other. This then results in a free flow of money. With a free flow of money people are able to get loans and spend more freely. When the fed funds rate is raised, money is "harder" to get, resulting in less flow of money and therefore less spending.
I have enjoyed all of Mr. Hirsch's videos. I was wondering if MPR could either collect them on DVD, or even just the drawings and written version of these features in paperback. - would make a good suppplementary textbook for many economic courses
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