I would like to get some feedback on the essay at the link below (unfortunatly, you will need Microsoft Explorer to view this file)
http://www.hvgreens.org/challenge/KfactorPaper.mht
I am putting out a challenge to the Dismal Science to prove that the current way of calculating loan payments is optimal for the economy. My contention is that if loan re-payment schedules were set to increase with expected inflation, the economy would run at a faster clip; plus the current expected flat growth would actually turn positive. Of course, to accomplish this, every fixed loan contract in the country would need to be re-set, but this is not impossible.
I also contend that if this new way of calculating loans was implemented, it would be much more easy to maintain full employment for longer stretches of time.
Please tell me what you think! If anything, it should be interesting.
Chuck Loucks