Watch this wonderful rant from legendary economist and commentary Larry Kudlow.
Larry is of course right – it is highly problematic that the Federal Reserve now seems to have gone back to the kind of Phillip curve inspired monetary policy that caused the inflationary failures back in the 1970s. This time around it will led to deflation rather than inflation. The Fed should focus on nominal (NGDP or inflation) rather than real (unemployment or RGDP) variables.
I have of course written extensively about this. See here:
Yellen should re-read Friedman’s “The Role of Monetary Policy” and lay the Phillips curve to rest
Talking to Ambrose about the Fed
Yellen is transforming the US economy into her favourite textbook model
The market’s message to Yellen: You have become too hawkish
Inching closer to a US recession, while Yellen is eager to hike
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If you want to hear me speak about these topics or other related topics don’t hesitate to contact my speaker agency Specialist Speakers – e-mail: daniel@specialistspeakers.com or roz@specialistspeakers.com.
