tag:blogger.com,1999:blog-5624436327404149621.post8770764029798284926..comments2024-03-28T20:07:31.640-07:00Comments on Quantitative Ease by Carola Binder: Let's Not Invent New Ways to Measure Higher InflationCarolahttp://www.blogger.com/profile/12783977056485775882noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-5624436327404149621.post-91855634396626726862013-07-25T19:46:37.199-07:002013-07-25T19:46:37.199-07:00In a deterministic word, consumption is a linear f...In a deterministic word, consumption is a linear function of asset + human capital (the coefficient is increasing in r through the income/substitution effect, but quantitatively it is not that important). Borrowers are people with negative assets but everyone has a positive asset + human capital. When interest rates decrease, it seems to me that human capital + asset increases, therefore everyone should increase consumption. What is the problem with that?<br /><br />Mattnoreply@blogger.com