What the 1980s Can Teach Us About Interest Rates and Inflation - The New York Times

When inflation was soaring 40 years ago and the economy slowed, short-term investing was perilous. But people with patience and long horizons came out fine.

The textbooks predict that when you raise interest rates high enough, an economy will sputter, and thats what happened:The secondVolcker recession began in July 1981 and lasted until November 1982. … [+2059 chars]

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