> My argument was that the rate of interest indirectly sets a floor
> to the rate of exploitation. In setting a floor I was only arguing
> that a rise in the rate of interest cuts back accumulation and causes
> unemployment.
Suppose the economy is experiencing a robust expansion when the rate of
interest increases. If aggregate demand is growing enough and if
expectations of profitability are very positive, then the increase in the
rate of interest may not necessarily cause a decrease in accumulation and
an increase in unemployment.
I had previously written:
> >I think we have to remember not to assume Say's Law when considering the
> >effects of state monetary policy (or at other times as well).
To which Paul replied:
> Taken as self evident.
It seems to me that the argument that increasing interest rates will
necessarily lead to a decrease in accumulation and a rise in unemployment
implicitly assumes Say's Law. E.g. in your argument, there is no
place for whether changes in aggregate demand will impact whether
increases in the rate of interest will necessarily lead to decreasing
accumulation & rising unemployment.
In solidarity, Jerry