Interest Rates and Nominal GDP Growth - Richard Werner

Prof. Richard Werner talks to Positiva Pengar about his 2018 study of the relationship between interest rates and nominal GDP growth, and his findings. Conducting an empirical examination of data from the UK, UK, Germany, and Japan, Werner concludes that "conventional monetary policy as operated by central banks for the past half-century is fundamentally flawed" and that interest rates actually follow GDP growth and are positively correlated - the exact opposite of the widely believed mainstream narrative.

These findings mean that central banks and the public should better focus on other policy tools, such as the quantity of credit, instead of the price of it.

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