I don't know about blameless but this guy really is shameless.. http://www.ft.com/cms/s/0/81c05200-03f2-11dd-b28b-000077b07658.html -------------------------------------snip Martin Wolf argues in the FT that central banks "can surely lean against the wind" even if they cannot eliminate bubbles. I know of no instance in which such a policy has been successful. For reasons I have outlined elsewhere (American Economic Association, January 2004), I doubt that it is possible. If it turns out to be feasible, I would become a strong supporter of "leaning against the wind".
As far as US monetary policy being (in Mr Wolf's words) "dangerously asymmetrical", I point out that over the past half-century the US economy has been in recession only one-seventh of the time. Yet the unemployment rate exhibits no trend. Hence the average rate of rise of unemployment has been far greater than its average pace of decline. Monetary policy in response has been more active during recessions than during periods of expansion, but scarcely "dangerous". Much of the commentary critical of my FT article (Comment, March 17) is directed less at its substance and more, as Mr Wolf describes it, at "the ideology I display". Ideology defines that set of ideas that we each believe explains how the world works and how we need to act to achieve our goals. Some of our views of causative forces are rational, some otherwise. Much of what we confront in reality is uncertain, some of it frighteningly so. Yet people have no choice but to make judgments on the nature of the tenuous ties of causation or they are immobilised. I do have an ideology. So does each member of the forum. I trust our views are subject to the same standards of evidence that apply to all rational discourse. My view of how the efficiency of global capitalism has evolved over the decades as new evidence has appeared contradicts some earlier judgments and confirms others. I have been surprised by the fierceness of investors in retrenching from risk since August. My view of the range of dispersion of outcomes has been shaken but not my judgment that free competitive markets are the unrivalled way to organise economies. We have tried regulation ranging from heavy to central planning. None meaningfully worked. Do we wish to retest the evidence? _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
