Serious Fun With Phillips

By |2017-04-13T19:24:05-04:00April 13th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

At the end of February, FRBNY President Bill Dudley made what was a widely shared remark that “animal spirits had been unleashed.” Confidence of just this sort is exactly what monetary policy is after, using all kinds of tools by which to get people happy about the future. According to rational expectations theory, which guides every post-Great Inflation model, if [...]