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Recessions can be avoided if you know about them ahead of time, so if you ever successfully predicted one your central bank isn't good enough.
by astrange 1y ago
Recessions can be avoided if you know about them ahead of time, so if you ever successfully predicted one your central bank isn't good enough.
- dragonwriter 1y agoIntervening as if there were a recession inminent when it is not also has harms (the exact same as the harms when recession interventions are maintained too long or employed too intensely, in terms of inflation, etc.), so I wouldn't agree that your central bank is bad if you happened to have guessed right once, but only if you have a demonstrably accurate objective method.
- astrange 1y ago> the exact same as the harms It actually appears that the alternative harms aren't as bad; that is, recessions aren't caused by prior expansions and we don't get one by "deserving" them. https://eml.berkeley.edu/~enakamura/papers/plucking.pdf https://eml.berkeley.edu/~enakamura/papers/plucking.pdf Hyperinflation is of course still not good, and it's hard to avoid a recession caused by a natural disaster or something.
- themafia 1y agoIs there a way to predict when central banks aren't "good enough" then? Point is, for a 100% positive case rate, I have to tolerate a 22% false positive rate. What exactly is the complaint here? Was this line of logic meant to make people who make these predictions look stupid or foolish somehow? To me, it mostly fails to.
- astrange 1y ago> Is there a way to predict when central banks aren't "good enough" then? https://fred.stlouisfed.org/series/SAHMREALTIME https://fred.stlouisfed.org/series/SAHMREALTIME