----- Original Message ----- From: [EMAIL PROTECTED] Date: Sunday, November 30, 2008 9:17 pm Subject: [Vo]:[OT]Inflation
> Hi, > > Can someone explain to me how raising interest rates is supposed to > reduceinflation? > > (I presume that the logic goes like this:- higher interest rates > mean borrowing > is more expensive, hence less will be borrowed, which in turn means > lowerinvestment and less economic activity). When inflation is high I don't think all economic activity is productive activity. > What I fail to see is why one would want to suppress economic > activity, as a > means of fighting inflation. It seems like a blunt instrument to me. > > Regards, > > Robin van Spaandonk <[EMAIL PROTECTED]> > harry
