Monday, October 29, 2018
Unicorns and neutral policy rates
neutral policy rate exists somewhere between a unicorn and socially oriented corporations
Progressives need remember
The rate structure for dollar debt
Is social engineered by the complex
Of federal and wall street institutions
It no more emerges from pure market transactions
and
pure market participant expectations
Then a fly emerges by spontaneous generation from horse apples
AND
There is no neutral rate of intetest
Where output prices are in steady state
only more or less succesfully contrived
Steady rates of Inflation
..........
One could define a path of policy rates that result from attempts to stabilize the rate of output inflation over some time interval
But that path of rates
would presumably
be arrived at thru macro managers adjustments to anticipated inflation outcomes
This is active management to expected outcomes
not talking about where something called
a price impact netural policy rate might be
neutrality exists
Invisibly dancing before their eyes