Stiglitz Says Steep Rate Hikes Aren't Always the Answer

The video discusses the implications of raising interest rates on the economy, particularly focusing on supply-side investments, market power, and inflation. It highlights how increased interest rates can exacerbate inflation, especially in housing, by passing costs onto rents. The video questions the effectiveness of interest rate hikes in addressing supply chain issues, suggesting they may worsen the situation.

What are the implications of not addressing the basic sources of economic problems when raising interest rates?

In what ways might raising interest rates exacerbate existing economic problems?