"The ability of monetary policy to influence employment has long been recognized as tenuous at best. Indeed, the current workhorse models in macroeconomics rely on some form of wage or price stickiness to generate real effects of monetary policy. As wages and prices adjust, the effects of monetary policy on the real economy dissipate; in other words, the effects are transitory. In addition, the experience of the 1970s clearly demonstrated that attempts to use monetary policy to pursue an employment or unemployment target can lead to extremely poor economic outcomes, jeopardizing both employment and inflation."
willamson's addendum
"People seem to forget this simple point. Outside of multiple-equilibrium models, which are not the "current workhorse models" taken seriously by central bankers, all models of short-run monetary non-neutrality involve transient real effects from monetary policy actions. Further, those real effects become smaller the more sophisticated economic agents become at seeing through central banking policy. Janet Yellen would like you to think that economic agents are so unsophisticated that they can't figure out how to adjust wages and prices in response to an announced future monetary policy, yet so sophisticated that they can predict the effects of the announced future monetary policy - for wages and prices. Further, she wants us to believe that the financial crisis - which happened in 2008 - will have lingering effects that need to be corrected by monetary policy, until 2016!"
outside multiple equilibrium models eh ?
i read that and know no better i sez to myself i sez
" hey man lets me look at some of them "
Monday, November 26, 2012
The well founded macro model these naked apes are building....
comes off like Penelope and her shroud sham weavings
The bastards really don't want to complete anything
at least until Adam smith
comes back from the market place of the dead
To rule this island earth
and avenge the public infamy
poured on temple of the invisible hand
and the golden calf
and also ....of course....
the random corn holing of the temple priests
by the swillish interlopers from keynesianopolis
hear bobby lucas tap dance
even as he unravels a bit more of the sacred shroud in progress
"This is bread-and-butter stuff in the hard sciences.
You try to estimate a given parameter in as many ways as you can,
consistent with the same theory.
If you can reduce a 3 orders of magnitude discrepancy to 1 order of magnitude
you are making progress.
Real science is hard work and you take what you can get."
(punch line)
" "Unusual state"? Is that what we call it
when our favorite models don't deliver what we had hoped?
I would call that our usual state."
hee hee hee heh heh heh
the tax to transfer system hung up high but not hung up high enough
Government transfer payments other than Medicare/Medicaid as a share of GDP
catabolic capitalism romney-nomics
the fact our system allows the capitalists to feast as they dismantle the drop outs and slough offs ...
yikes !
yikes !
Subscribe to:
Posts (Atom)