The whole game of macronautics is about comparative dynamics
The target is often far less problematic then the closing speed
Here in the states we all want to get to nairu as well as retain a tame price level
But the acceptable time to target for arrival at nairu
and the acceptable time to retstore the fetish 2% inflation rate
Seems oddly asymmetric
If we are below nairu..er actually we pre empt that outcome
If we are above nairu we seem to accept a slow clopping pace back down
vide now !
If we are below 2% ...yikes we don't do anything to get back to target
let alone do it at flank speed
If above target inflation ?
There and only there
do we seem to have a reasonable acceptable time to closing on target
Now I admit since the volckerdammerung
We have had very little volatility in the inflation core rate
And a bit more in the UE flux
But let's get some explicit time frames here
for the four different deviations
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whats the welfare loss from one percent off target on inflation versus one percent off target on employment
on the up side ?
on the down side ?
we have four determinations
and each one is expressed as a function of both distance and side of target eh ?
is the welfare loss linear in both or either dimension ??
if bent
how bent ?
gets kinda interesting
