Mark Thoma:
Paul Ryan’s imaginary expertise: That’s not even his worst proposal for monetary policy. That distinction goes to his call to raise interest rates to cure the recession — because “there’s a lot of capital parked out there, and we need to coax it out into the markets.” This shows a serious misunderstanding of what’s holding the economy back. If interest rates are increased, the higher return on financial assets will cause more people to provide funds to financial markets — but the supply of funds isn’t the problem.
