“We’ve had 40 years, from 1980 to 2020, where we’ve had disinflation and low interest rates, but then we turn the corner to face completely new rules. We have rapidly growing inflation now, and as a result, higher interest rates. This means we have to learn how to do things differently.”
Phelps says the solution to the last economic crisis, stimulus via low interest rates, is at least partially the cause of our current problems.
