imagine the FED's targeted rate of inflation rose as the actual rate of unemployment rose
and vis a versa
of course this is fine
but such a policy remains passive
only a measure of fiscal deficit borrowing accomodation
here's my man chinn chinn making the fatal pro capitalist assumption
"Raising the expected inflation rate will lower real interest rates ..."
yup
but
" ... spur investment and consumption" ?
ya more spending for consumption thru usury so long as credit constraint lines are lowered
but more spending for investment ? real investment in plant saft ware and equipment ?
not if the C-brutes don't want to ...
what makes them increase their capacity with excess capacity in place ?
replacing existing capacity maybe but additional capacity ..why
only if demand sustainably exceeds capacity
ie
only if fiscal policy goes further into deficit and usury extends the household debt load
