Yes, there’s more, and it’s glorious

Richard Murphy says:
September 19 2021 at 8:22 pm
Cite them

And in the world of near zero interest rates explain how that now works?

Real world evidence please

And note Krugman on this and what he says influences long term rates… https://www.nber.org/system/files/chapters/c6948/c6948.pdf

Rajiev says:
September 19 2021 at 9:41 pm
Richard,

As in Krugman’s paper, many factors affect real and nominal exchange rates – interest rates being one of them.

One factor he specifically does NOT mention in this paper you link to is productivity. As is well known, productivity has little or no effect on exchange rates.

It might be worth you reading papers before you link to them in future, as this one does not help your case. Real world examples have also shown, repeatedly that productivity is simply not a factor for driving exchange rates. It is very much the other way around, if anything, with exchange rates driving productivity.

You also ask for real world evidence, yet seem utterly unable to provide any yourself.

Richard Murphy says:
September 19 2021 at 9:46 pm
Have you read the paper?

I suggest you do so and see what he discusses when looking at long term equilibrium exchange rates

Interest rate changes are short term factors and – you might like to muse in this – really do not happen any more

You are, politely, ignoring the evidence

And I note but a single citation again

No more comments like yours will appear

Interest rate changes do not happen any more then? Oh.

And there was me thinking that real interest rates are the combination of the nominal interest rate and the inflation rate. And given that the inflation rate is bouncing around all over the place then the real interest rate is constantly changing. Which might be one of those reasons the FX dealers are still in business, as relative currency rates change?

6 thoughts on “Yes, there’s more, and it’s glorious”

  1. There is a terrible internet trend (particularly on Twitter) of people shouting “Go away and read the literature”. Sometimes it’s justified, but mostly it’s used to stifle debate. Murphy doesn’t care much for debate at all.

  2. You are, politely, ignoring the evidence

    And I note but a single citation again

    No more comments like yours will appear

    Is “politely” the new “candidly”?

  3. Dennis, Asking The Tough Questions

    I no longer wonder about why Murphy is what he is. What I wonder about is why people bother trying to engage in discussion/debate with him. It’s not like there’s anything less than certainty as to the outcome of such an attempt.

  4. It’s sport Dennis. There is no greater fool on the internet, and pompous and utterly dislikeable to boot. The more people wind him up and challenge his nonsense the better.

  5. @Dennis
    “What I wonder about is why people bother trying to engage in discussion/debate with him. ”

    I used to think the same until I heard him on a serious radio program in Ireland spouting his drivel which none of the hosts (including a well known business man) called him up on. A few weeks later I was in blighty for a day and lo and behold, who popped up on the radio, but the SoE himself, again with his sanctimoniousness rubbish.

    He ingratiates himself into the media and if his inanities are not pointed out, more people will believe he knows what he is talking about.

  6. “No more comments like yours will appear”

    He really is his own worst enemy. I’m reminded of that old quip:

    “The biggest troublemaker you’ll ever have to deal with watches you from the mirror every morning.”

    Poor Richard does have to put up with an awful lot.

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