Why the Federal Reserve Should Keep Interest Rates Lower for Longer

by Tim Worstall

Liberty Street Economics, the blog of the Federal Reserve Bank of New York, gives us a gloriously geeky study of long term unemployment. The implication of which is that the Federal Reserve itself should keep interest rates lower for longer. The issue they look at is why is it that the long term unemployed find it so hard to get back into work? And given that US unemployment is now beginning to look much more like European – style unemployment this is an important thing we want to find out about. It’s also known that Janet Yellen and others have been vexed by this question and also that it has been influencing their interest rate decisions.

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