Wednesday, February 1, 2017

Typical meme toxins "Wages aren’t in that description. Wages are primarily a guide to estimating full employment (economic slack). Rising wage growth indicates the economy is approaching full employment. Wage growth in excess of the inflation target plus productivity growth raises warning signs that the economy is operating beyond full employment. Also, commodity prices are included as idiosyncratic shocks. Finally, the labor market data is very clearly not the ultimate arbiter of price stability. In the long-run, inflation expectations are the ultimate arbiter of price stability."

Some  use the term employment max v full employment

Others say sustainable employment

All mean just to the north edge of the estimated
"nominal wage acceleration zone "

Surprisingly this contrivance of 70's macro nautics
Rarely gets the credit it may deserve for the relative decline
 in real wage rates
           secular climb thru time

This taboo zone  is sacred
willfully violated only once ( late 90's )  since the volcker Dammerung
During the dot com bubble up
and the fabulous fiscal surplus soar

Attempts to dive to the " true bottom "
Just to see what's real and what's fantasy
have never even been broached by establishment Merlins

Step one of any new macro for job class pols should be
To undertake such an expedition
A vickrey drive toward full mobilization

If we need a output price freeze pro temp
So be it

Society must from time to time
Probe  the alleged  operational boundaries of its various instituted systems

If certain institutions need to be modified as a result

Bravo !