@SteveRoth So even though in the short run, raising interest rates works under both regimes, only under the conventional model of a Ricardian regime is interest rate policy straightforwardly good policy. The effect is transient in both cases, but under the Ricardian regime it does no long-term harm, while in the non-Ricardian (more realistic, at least on face) regime, the transient desired effect is just a prelude for an even worse situation. /fin