the point
get back above zero so the fed can start cranking up the policy rate
-7.5 =>-2.5
this is based on a rate setting taylor rule that might model fed actions
background
mankiw taylor rule
Federal funds rate = 8.5 + 1.4 (Core inflation - Unemployment).
his plot
5plus => 1 ish
excited mankiw familiar :
"At the current inflation rate, the unemployment rate needs to drop to 8.3% from the current 8.5% for the model to signal positive rates. We’re getting close."
dueling parameter estimates here of course
but note the all fronts effort to redefine recovery
much like the change in the NAIRU to plus 7
on the other side of the firing line:
since economy re expansion estimates have not improved since then
pk prolly sticks closely to this projection of his in '10
zero till last quarter of '13
background
mankiw taylor rule
Federal funds rate = 8.5 + 1.4 (Core inflation - Unemployment).
his plot
5plus => 1 ish
excited mankiw familiar :
"At the current inflation rate, the unemployment rate needs to drop to 8.3% from the current 8.5% for the model to signal positive rates. We’re getting close."
dueling parameter estimates here of course
but note the all fronts effort to redefine recovery
much like the change in the NAIRU to plus 7
on the other side of the firing line:
since economy re expansion estimates have not improved since then
pk prolly sticks closely to this projection of his in '10
zero till last quarter of '13
