Interest rates on a number of government bonds have risen considerably since the beginning of the year. Analysts see this as a sign across the board that the markets are putting the central banks to the test:
Will they want to push down rising interest rates with new money creation and accept higher inflation in the process? Can central banks even take their foot off the gas pedal? Are they even in a dilemma? And what is the real state of investor confidence in central banks?
We discussed these and other questions with Philipp Bagus. He is a professor of economics at the Universidad Rey Juan Carlos in Madrid. His research focuses on monetary and business cycle theory.
In German only.