"Raising interest rates will not solve the problem of inflation," the Columbia University professor told the world economic forum in Davos, Switzerland. "It will not create more food. This will only increase difficulties because people will not be able to invest."
The Fed will release the latest minutes of its monetary policy meeting in a few days, which may further reveal its increasingly aggressive tightening position, including the consideration of raising interest rates by 50 basis points earlier this month. Stiglitz thinks another way should be found.
"What needs to be done is to intervene on the supply side," he said. "One thing President Biden is trying to do is to increase the care of children and allow more women to enter the labor market, so as to release the limited labor supply."
The economist believes that food production should also be a top priority in both the United States and the world.
