by Jérémie Cohen-Setton
on 20th July 2015- http://www.bruegel.org
![](http://www.bruegel.org/uploads/RTEmagicC_Screen_Shot_2015-07-20_at_09.17.33.png.png)
What’s at stake: Neo-Fisherism is on the blogs again. The idea that low interest rates are deflationary – that we’ve had the sign on monetary policy wrong! – started as a fringe theory on the corners of the blogosphere 3 years ago. Michael Woodford has now confirmed that modern theory, indeed, implies the Neo-Fisherian view when people’s expectations are infinitely rational. For Woodford, this is however a paradox of perfect foresight analysis, rather than something actually relevant for monetary policy.