To: RightWhale
The prime rate has to be raised into the power zone. 2% to 5%. It's too low to encourage investmentHelp me here. I seem to remember something from my Economics courses in the '60s about there being interest rates that encourage a successful economy, and they can neither be too low nor too high. Is this the "power zone" idea you refer to?
I'm actually tempted to go to a used book store and see if I can find an old Samuelson text, just to connect my educational background with the stuff I read today.
19 posted on
09/03/2002 4:40:34 PM PDT by
grania
To: grania
It's just RightWhale's Economic Theory. The Prime Rate can be used to control the economy, but it works only within a narrow range. Below 2%, the economy will be stagnant. Above 5%, possible inflation. The range 2% to 5% is where the Fed can play and maybe get some results they like.
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