No wonder that the economy may be experiencing “super-hysteresis” effects

When someone like William Dudley, with a permanent vote on the FOMC, is capable of uttering so many empty words in a single sentence, the economy will continue to be damaged:

“We hope that relatively soon we will become reasonably confident that inflation will return to our 2 percent objective,” he said at Hofstra University. Dudley said it was “very logical” to expect that the Fed’s inflation and employment conditions would be met “soon,” allowing policymakers to “start thinking about raising the short-term interest rates.”

(Note: “super-hysteresis” effects refers to the impact of the great recession on both the level and growth rate of output, that would be permanently lowered)

HT James Alexander

One thought on “No wonder that the economy may be experiencing “super-hysteresis” effects

  1. The pscyhodrama continues. Which high-falutin’ econometric central bank model has in it a disagreement between the boss and one of their two top aides? Dudley is a torn man: he doesn’t want to raise rates but feels he has to be loyal to his boss. And ends up a gibbering wreck spouting nonsense like this. You couldn’t make it up and you certainly couldn’t model it. It’s just too embarrassing for “elite monetary economists” to think about or certainly to write about, except in their memoirs. Remember, it’s not about personalities but the models and the data, until several years after the events.

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