"The problem with socialism is you eventually run out of other people's money" - Margaret Thatcher
"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design" - F.A. Hayek
Monday, November 21, 2011
Another look at Nominal GDP targeting.
If inflation expectations increase, doesn't that shift the Phillips curve?
Based on historical evidence, only if the policy of attempting to increase inflation expectations were to continue into the long run. Isnt there a SR and LR PC?
Dr. P, wouldn't it be fair to say that a sizable amount of the 60s & 70s Phillips Curve shift(s) were attributable to central bank policy? (ie: targeting interest rates in an inflationary environment)
Based on historical evidence, only if the policy of attempting to increase inflation expectations were to continue into the long run. Isnt there a SR and LR PC?
ReplyDeleteDo you believe the PC has shifted since QE(s)?
Dr. P, wouldn't it be fair to say that a sizable amount of the 60s & 70s Phillips Curve shift(s) were attributable to central bank policy? (ie: targeting interest rates in an inflationary environment)
ReplyDeleteEconP: That sounds right to me. Let's not forget the supply shocks either.
ReplyDelete