The ECI has been rather benign through the '90's, no? And haven't they been
moving rates to prevent capital outflows, even as they worry about the trade
deficit? Given the FOMC meets every six weeks haven't they been far more worried
about bank balance sheets in the face of high corporate debt/consumer debt even
as profits have been better in the 90's than the 80's? Isn't household debt at
an all time high precisely because the ECI is benign hence credit/debt inflation
to keep aggregate demand afloat?
Ian
> -----Original Message-----
> From: [EMAIL PROTECTED]
> [mailto:[EMAIL PROTECTED]]On Behalf Of Jim Devine
> Sent: Wednesday, January 31, 2001 2:42 PM
> To: [EMAIL PROTECTED]
> Subject: [PEN-L:7617] Re: RE: Re: Re:GDP Byte by Dean Baker, 1/31/01
>
>
> At 02:23 PM 1/31/01 -0800, you wrote:
> >I understand that. I was refering to the way the Fed manipulates the
> >meaning[s]
> >of the term. Surely they weren't moving interest rates like crazy because
> >of the
> >CPI? What's AG call it, "constructive ambiguity" or some such....?
>
> no, they move it because of fears of wage inflation, which are seen as
> encouraging consumer price inflation and/or profits, though the latter
> aren't mentioned. (It wouldn't be polite.)
>
> BTW, nowadays the Fed is ignoring the CPI. It pays attention to the price
> index for personal consumption expenditures.
>
> Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~jdevine
>
