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re: Can someone explain why raising interest rates in recession helps?
Posted on 9/26/22 at 2:31 pm to ChunkyLover54
Posted on 9/26/22 at 2:31 pm to ChunkyLover54
Raising rates does not fix inflation. Raising the rate slows the market, any market, which in turn dampens demand. Low demand is what makes inflation go down, ie, demand destruction. Nothing this biden admin has done will fix inflation.
1
Posted on 9/26/22 at 2:48 pm to ninthward
It reduces the amount of money being loaned out by increasing the cost of borrowing for future loans. It does nothing to the current money supply. It only destroys demand for financed purchases
Posted on 9/26/22 at 3:37 pm to ChunkyLover54
Austrian Economics states that savings are needed for a productive economy. Interest rates help with that.
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