Early Fisherism
John Taylor has an interesting weblog postal service alongside a smashing title, "Staggering Neo-Fisherian Ideas together with Staggered Contracts." John goes dorsum to a newspaper he wrote inward 1982 for the Jackson Hole conference, on the number of that time, how to lower inflation. He presented simulations of a model alongside staggered wage setting, which I reproduce below.
So every bit far dorsum every bit 1982, hither is a model inward which lower involvement rates gibe alongside lower inflation, both inward the brusque run together with the long run. John's model has coin inward it, hence the mechanics are a pre-announced monetary contraction.
Sargent's famous "Ends of 4 big inflations" tells an fifty-fifty to a greater extent than radical story.
On solving the governments' fiscal problems, inflation ends instantly. Sargent together with Wallace alas hit non bring involvement charge per unit of measurement data, but from the inflation information it's pretty plausible that involvement rates barbarous similar a rock when the financial reforms are implemented. They bring coin stock measures -- together with the ends of these inflations did non bring whatever monetary tightening at all. Money stock measures all expanded substantially every bit inflation ended.
I've been having an interesting dorsum together with forth alongside a correspondent close Milton Friedman's views. In "Do higher involvement rates heighten or lower inflation?" I quoted Friedman's 1968 address, together with said he believed that an involvement charge per unit of measurement peg is unstable. Not hence fast says my correspondent, together with passed on a lovely memo written past times Milton Friedman -- meliorate all the same 1 time owned past times Anna Schwartz. (Yes I checked that it's ok to postal service this)
together with afterward
As I read this quote, Friedman emphasizes that lower involvement rates come upwardly alone alongside lower inflation inward the long run, hence in that place is around Fishery theory here. But inward the brusque run, if the Fed lowers coin growth, together with hence involvement rates volition offset rising but together with hence reject every bit inflation declines. So the implied brusque run human relationship goes the other way.
As I read it, then, Friedman says it is possible to target involvement rates. But to hit hence requires especially active coin increase policy to offset the instability that would number from merely announcing a fixed involvement rate.
That leads to a really interesting question, how the same involvement charge per unit of measurement path could last supported past times unlike coin increase paths.
So every bit far dorsum every bit 1982, hither is a model inward which lower involvement rates gibe alongside lower inflation, both inward the brusque run together with the long run. John's model has coin inward it, hence the mechanics are a pre-announced monetary contraction.
Sargent's famous "Ends of 4 big inflations" tells an fifty-fifty to a greater extent than radical story.
On solving the governments' fiscal problems, inflation ends instantly. Sargent together with Wallace alas hit non bring involvement charge per unit of measurement data, but from the inflation information it's pretty plausible that involvement rates barbarous similar a rock when the financial reforms are implemented. They bring coin stock measures -- together with the ends of these inflations did non bring whatever monetary tightening at all. Money stock measures all expanded substantially every bit inflation ended.
I've been having an interesting dorsum together with forth alongside a correspondent close Milton Friedman's views. In "Do higher involvement rates heighten or lower inflation?" I quoted Friedman's 1968 address, together with said he believed that an involvement charge per unit of measurement peg is unstable. Not hence fast says my correspondent, together with passed on a lovely memo written past times Milton Friedman -- meliorate all the same 1 time owned past times Anna Schwartz. (Yes I checked that it's ok to postal service this)
together with afterward
As I read this quote, Friedman emphasizes that lower involvement rates come upwardly alone alongside lower inflation inward the long run, hence in that place is around Fishery theory here. But inward the brusque run, if the Fed lowers coin growth, together with hence involvement rates volition offset rising but together with hence reject every bit inflation declines. So the implied brusque run human relationship goes the other way.
As I read it, then, Friedman says it is possible to target involvement rates. But to hit hence requires especially active coin increase policy to offset the instability that would number from merely announcing a fixed involvement rate.
That leads to a really interesting question, how the same involvement charge per unit of measurement path could last supported past times unlike coin increase paths.
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