This should be a sign that New Keynesian macro (aka bastardized Keynes) is a dead-end in so many critical ways. The suggested explanations here reflect limited introspection; Mankiw's outsized influence sadly means the propagation of a narrower perspective
If you're going to keep using the short run vs long run fudge, at least acknowledge what the BoJ and the Fed have done in just the past 10 years to exert strong influence/control over long-term interest rates.
Mankiw perpetuates his favored (but unfalsifiable) supply-demand explanation of interest rates. But it is highly inappropriate (financial assets != commodities). It's a form of fudging that confuses more than it enlightens. Listen to @jonsindreu instead:
Nominal phenomena (e.g. interest rates, income growth, inflation) warrant institutional explanations, and yet the institutional descriptions that lie at the heart of (much of) mainstream macro theory remain incorrect. How is new income generated? What constrains that process?
There are critics (mainstream & heterodox) who seek to get these institutional descriptions right, but are still summarily dismissed by a more influential group (incl. Mankiw). Despite recent shifts (ie ad hoc ELB escape clauses), still yet to see a credible course-correction
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