Fed Chair Janet Yellen Defends 3% Inflation Floor; Says Lower Target Requires Cutting Structural Impediments

A Benjamin Cole post February 11, 2016, Washington, D.C.—Defiantly defending the U.S. Federal Reserve’s 3% inflation floor, Fed Chair Janet Yellen’s swatted away questions from U.S. Senators who said lower rates of inflation could be obtained safely. The “public and representatives have embraced thickets of structural impediments to growth,” retorted Yellen. “For the economy to […]

The ‘it´s structural’ bias

A marked characteristic of the post crisis period, especially in advanced economies, is that problems or issues are frequently defined as structural. It seems it is even more general than that because in a recent report on Korea, Goldman Sachs´ Asia Economic Analyst proposes the view that “contrary to the market´s general expectation that the […]

Dear BOJ Top Banana Kuroda: Damn the Torpedoes and Full Stream Ahead! Structural Impediments Are Eternal In Democracies—So What?

A guest post by Benjamin Cole The Bank of Japan’s quantitative easing program has worked. Begun 13 months ago, the BoJ QE program buys about $50 billion a month in securities in an economy roughly one-half the size of the United States. So the BoJ is going into QE with more resolve than the clay-footed […]

John Taylor takes another stab at giving a structural bias to the ongoing weak economic performance

John Taylor discriminates between the 1983-85 and the 2009-12 expansions. The first he calls “economic expansion” while he refers to the second as a “regulatory expansion”. To him that is the best explanation for the very different economic performances in the two expansions. Taylor puts up this comparative Real GDP growth chart: And argues the […]

Fed Official says: The problem is structural. There´s not much monetary policy can do to help revive the economy.

He´s back again with his “it´s structural” meme. In 2010, less than a year after becoming president of the Minneapolis Fed, Kocherlakota made a speech in which: He argued that unemployment was structural and That if the Fed Funds rate was kept at zero the appearance of deflation was only a question of time! With regard to […]

The search for “structural” causes of unemployment goes on

Since it´s been hard to get aggregate evidence for “structural” causes of unemployment, David Andolfatto tries to do so at a more disaggregated level, comparing changes in job vacancy rates and changes in unemployment at the MSA (Metropolitan Statistical Area) level. As the bible says: “Search and Ye Shall Find”.  And Andolfatto is confident he […]

It´s the baby boomers fault – a new stab at a “structural” explanation

A new Chicago Fed study says: The long-running decline in the proportion of Americans still tied to the labor force relative to the nation’s total population has been vexing economists and government officials for some time. They worry the sharp decline in what is called the labor-force-participation rate is a sign overall economic conditions have […]