| Tyrone Slothrop |
04-15-2010 10:52 PM |
Re: 47% Pay No Fed Income Tax
Quote:
Originally Posted by Hank Chinaski
(Post 421661)
will you start a list of shit Ty claims to be an expert in? central banking and monetary policy, all health care issues and the cost of pollution controls should be a good start, but I want a living document.
|
I'm not claiming to be an expert in central banking. The trade-off between inflation and unemployment and the central bank's role is something you hear about in the first semester of college macroeconomics. At least, I did, that was all I lasted. This is why there is general agreement that central banks must be politically independent, because otherwise there would be substantial political pressure to combat unemployment and invite inflation. Plus, the people who would benefit from inflation aren't represented much by Washington elites.
eta: Here is Bernanke describing the trade-off not too long ago:
Quote:
The public’s understanding of the Federal Reserve’s commitment to price stability helps to anchor inflation expectations and enhances the effectiveness of monetary policy, thereby contributing to stability in both prices and economic activity. Indeed, the longer-run inflation expectations of households and businesses have remained very stable over recent years. The Federal Reserve has not followed the suggestion of some that it pursue a monetary policy strategy aimed at pushing up longer-run inflation expectations. In theory, such an approach could reduce real interest rates and so stimulate spending and output. However, that theoretical argument ignores the risk that such a policy could cause the public to lose confidence in the central bank’s willingness to resist further upward shifts in inflation, and so undermine the effectiveness of monetary policy going forward. The anchoring of inflation expectations is a hard-won success that has been achieved over the course of three decades, and this stability cannot be taken for granted. Therefore, the Federal Reserve’s policy actions as well as its communications have been aimed at keeping inflation expectations firmly anchored.
|
via Cato's Will Wilkinson |
