Elliott waves and Cambridge

[Brad DeLong]

>Bradford DeLong wrote:
>
>>>Bradford DeLong wrote:
>>>
>>>>Will you allow me to say that lowering the interest rate is 
>>>>likely to raise the number and aggregate total cost of investment 
>>>>projects with positive risk-adjusted net present value?
>>>
>>>In theory, but why then do changes in interest rates do so little 
>>>to explain aggregate investment?
>>>
>>>Doug
>>
>>
>>Because other things--business cash flow, expectations of future 
>>demand, animal spirits--are much more important? (Save in 
>>construction, where interest rates do matter.)
>
>Exactly what I had in mind. So why does it matter much if changes in 
>the interest rate affect the number of investment projects with NPV?
>
>Doug

Because it's the only effective lever of macroeconomic control that 
we have, given the Congress's... limited... ability to conduct 
discretionary fiscal policy in a timely fashion...

Brad DeLong