tag:blogger.com,1999:blog-2499715909956774229.post4635082352664240048..comments2024-03-09T02:22:57.289-08:00Comments on Stephen Williamson: New Monetarist Economics: What is full employment anyway, and how would we know if we are there?Stephen Williamsonhttp://www.blogger.com/profile/01434465858419028592noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-2499715909956774229.post-62585574459127319922017-04-04T09:55:21.207-07:002017-04-04T09:55:21.207-07:00Neither I think. You could read Friedman's 196...Neither I think. You could read Friedman's 1968 AER paper to see what he actually said, but my memory is that he was thinking about the effects of monetary policy. So, monetary policy can cause an inflation surprise which coincides with an unemployment surprise. But, sometimes central bankers will slip into the "unemployment causing inflation" causality story. They'll tell the story the other way too - like Friedman.Stephen Williamsonhttps://www.blogger.com/profile/01434465858419028592noreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-48645655732157105802017-04-04T07:43:35.277-07:002017-04-04T07:43:35.277-07:00Didn't the causality in Friedman's Phillip...Didn't the causality in Friedman's Phillips curve run from higher than anticipated inflation to lower unemployment, not the other way round (unemployment -> lower inflation, which seems to be the most common interpretation that I've seen in my short life)?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-54648929300131233912017-03-21T07:58:48.244-07:002017-03-21T07:58:48.244-07:00.
Nice insightful column.
One thing I wonde....<br /> Nice insightful column.<br /><br /> One thing I wonder about is the possibility that policy implementing economists are a bit insulated from reality. It seems possible their personal experiences might reinforce a feeling that everything is all right.<br /><br /> Meanwhile countervailing data may subconsciously be given short shrift. A shrinking middle class, stagnant wages, declining labor force participation of adult males all seem ignored.<br /><br />Could it be argued that full employment is characterized by a robust and growing middle class? Economics is both a hard and social science and social criteria may belong in the definition of full employment.<br /><br />Is it wise to try to throttle growth as soon as policy mandates are achieved, thus seeking to maintain a virtuous steady state equilibrium? Might it not be better to attempt more of a sine wave economic policy, deliberately overshooting targets to bring the marginal sidelined workers into the economy where they can gain experience and then, if necessary, briefly overshooting constraining measures to quickly contain possible excesses?<br />Anonymoushttps://www.blogger.com/profile/01098498673510354088noreply@blogger.com