Will the EU Policy of the Increasing Interest Rate Be Able to Reduce Inflation? Do We Need Keynes to Win the Battle against the 2023-2029 Continuing Depression?

Abstract

The paper used four models of Keynes (1936), Hicks (1937), Solow-Swan (1956) and Temin-Vines (2014) to estimate mainly the end result of the rising EU interest rate. We rejected for nowadays both the sticky money wages and prices prevailed at Keynes’ time, but we had to show Keynes’… shifting equilibrium . We also rejected the possibility of crowding-out. We provided an analysis clearing-out the exact triple role of the interest rate. We expressed our dissatisfaction about the way the above models treated, or ignored, the important role of depreciation and of embodied technical progress ! Reference has been made to GFC, the COVID-19, and the Energy crisis. The GFC in fact did the job—that could devaluation do of the Euro—and even better.