📰 Source: mises | Mises Wire

✍️ Original author: Kevin Huynh

When long-term Treasury yields rise, one explanation is often given: investors expect more inflation, so lenders demand a higher nominal rate to offset the future loss of purchasing power. Expected inflation is treated as an addition to an otherwise “real” rate. Murray Rothbard argued that this begins in the wrong place. Rothbard’s Argument In Man, Economy, and State, Rothbard says economists following Irving Fisher “erred by concentrating on the loan rate rather than on the natural rate.” The natural rate is the return earned across production when present factors are exchanged for future

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