4 ms·
US monetary policy has not "failed" pretty much since Nixon. Janet Yellen's tenure is really the only blemish, but only because she didn't raise rates when we c
by qppo 6y ago
US monetary policy has not "failed" pretty much since Nixon. Janet Yellen's tenure is really the only blemish, but only because she didn't raise rates when we could have.
I think you're confusing the "Dual Mandate" of the Fed to minimize inflation and maximize employment with some misplaced belief in economics. Every American economist of the last century has realized these are often competing ideals. It's their raison d'etre, without it the Fed doesn't exist.
- 0xB31B1B 6y agoYea, the point is that all the evidence we have shows the connection between inflation and employment has weakened since the 70s and is pretty tenuous right now. It theoretically exists, but its unclear what is going on in a world of both increasing automation and decreasing or stagnant productivity per worker.
- freeone3000 6y agoAnd yet somehow they have in fact kept inflation at less than 2% while bringing unemployment to near zero (well, pre-pandemic, as the rest of the article, this year's numbers are screwy). That's weird, right? What's up with that?
- qppo 6y agoThat has more to do with globalization and how we measure inflation and unemployment than monetary policy. If you look at markets that aren't influenced as highly by global trade (like housing, healthcare, and education) they are greatly inflated.
- EdwardDiego 6y agoI was trying to paraphrase the original article, so hold no strong opinion on this as it's largely outside my sphere. :)