The level of ignorance in economic circles

The Interest Rate Lower Bound Trap and the ideas that keep us there

Wren lewis, runs a blog called MiniMacro or something.

He thinks the term structure observable on the treasury curve is both, 1) Representative of the economy and 2) The term points are cast in stone by a miracle of Keynes.

Bot wrong.

The lower bound is where a monotonically increasing curve meets the X axis on the left.  That point awalys existsd, everywhere anytime one is using an XY axis with a monotonically increasing curve.

Here is where he fouls up.

The actual term lengths do not correspond exactly to the term length of the contracted government bonds.  Traders use the liquid market to keep interest charges and term lengths s coherent, traders so not do the Keynesian cycle. Second, as we all know, our central banker does not track the economy, it tracks the Federal borrowings.  Powell is quite aware of the problem, as is Chriostine, Blanchard, Delong, etc...  They have all figured it out.

So Simon is having a ludicrous argument with himself, the economy asynchronously adjusts the curve as needed.  Further, the real curve is kept hidden in the Goldman Sacks options desk, only available to wealthy traders for a fee.  I think Krugman and Simon are the only two economists left who are doing the Keynesian cycle, and good luck to them.  I would suggest they adopt the correct math.