The issue with this theory post-internet economy is: its only true if that money is spent chasing a limited amount of scarce goods and services. But the majority of the US economy today is spent on goods and services that are no longer scarce (more accurately, whose unit costs are so low that they might as well be unlimited). We are in a very different world than the one Volker presided over, and this is the core axiom as to why: The economists who correctly invented this central bank interest rate lever could never have foreseen a world so supply-unconstrained.

Another way to look at this: Low interest rates can induce demand and drive inflation. But they also control the rates when financing supply-side production; so they can also ramp up supply to meet increased demand.

1. Not all goods and services are like this, obviously. Real estate is the big one that low interest rates will continue to inflate. We need legislative-side solutions to this, ideally focused at the state and local levels.

2. None of this applies if you have an economy culturally resistant to consumerism, like Japan. Everything flips on its head and things get weird. But that's not the US.