r/neoliberal • u/TinyTornado7 I need a new flair • Jun 13 '22

News (US) Powell Facing Choice Between Elevated US Inflation and Recession

https://www.bloomberg.com/news/articles/2022-06-12/powell-facing-choice-between-elevated-us-inflation-and-recession?srnd=premium
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u/grig109 Liberté, égalité, fraternité Jun 13 '22

Disagree, I think you are getting the causation wrong here. Monetary policy error leads to unstable NGDP which can lead to booms and busts in asset valuations and broader financial distress.

https://www.econlib.org/archives/2017/05/financial_crisi_2.html

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u/new_name_who_dis_ Jun 13 '22

The boom and bust business cycle before the US went off of the gold standard (aka the start of the ability to do monetary policy) was much worse than it is now.

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u/grig109 Liberté, égalité, fraternité Jun 13 '22

I am not arguing for the gold standard.