5 Responses

  1. “As such, they are encouraged by recent the Fed move to target unemployment…”

    So since the Phillips Curve will obviously never go away, is there hope for other relics that were discredited during the seventies? I’m hoping for a glam rock comeback and new production of the Volkswagen Thing/

  2. As I see it, policymakers were dazzled by three decades of steady inflation and low economic growth.

  3. Todd Mason says:

    Without a world view to accommodate or wealthy donors to please, a reasonable person might say the the Fed is omnipotent in some economies and largely ineffectual in others. Said reasonable person, looking at a sluggish economy awash in liquidity, might say that the Fed isn’t particularly effective at the moment. Not that AEI will ever acknowledge such fact. First the excuse was that the Fed hadn’t properly signalled its intent to keep the printing presses rolling. Next it will be that the new bills have that off-putting orange hue.

    The real reason, of course, is that business won’t make products it can’t sell, and the beleaguered middle class is in no position to buy. QE’s ! through !!! are not helping Joe Sixpack. http://www.freakonomics.com/2011/05/25/is-the-fed-responsible-for-higher-oil-prices/

    Bill Gross, the world’s most successful bond investor, has an excellent explanation here: http://www.pimco.com/EN/Insights/Pages/Money-for-Nothin-Writing-Checks-for-Free.aspx His bottom line: Be worried. There is a price to pay.

  4. Vic Volpe says:

    We need to stop listening to accountants and find leaders that will turn our visionaries loose. See blog: Economics Without The B.S.

  5. Saturos says:

    “One possible conclusion is that a central banker should have a balance of humility and hubris.”

    Another possible conclusion is that central bankers should have, y’know, rational expectations.

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