your opinion on monetary policy...?
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02-01-2013, 12:00 PM
Post: #1
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your opinion on monetary policy...?
your opinion what implications it would have on the economy if the Fed were required to conduct monetary policy so as to hold unemployment rate below 4%, the goal specified in the Humphrey-Hawkins Act (when the natural rate of unemployment was 5%).
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02-01-2013, 12:08 PM
Post: #2
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Increase in technology related incomes, increase in rational investing, decrease in social security spending. Mostly good all around. The question is, are the figures "made up" or are they really symptomatic of the real issues?
On the flip side, it might require more government spending, more middle-income frustration, and more competition. The reason why the policy did not go through may be a higher-income anxiety about markets and competition. But these are not wholly bad things. It's another case of reverse psychology going awry not to institute the policy. Ads |
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02-01-2013, 12:08 PM
Post: #3
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There would be political pressure to do policies that make money freely available. As money becomes more widely available, loan interest rates will drop, businesses will hire new workers. U-3 would likely drop, and if it drops below 4% the policy will be deemed successful, and people will be loving it. The honeymoon will be short lived, some event will reveal the underlying malinvestment, people will be fired, businesses will be liquidated, and the Fed is in a bind.
The question is, how would the Fed be "required" to do this? |
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