All models wrong, some useful meme applies. As does when you’re a hammer, every problem looks like a nail (monetary policy). Often overlooked is that there is a target rate of inflation, 2%, based on the view that an expanding economy means more transactions needing more money in circulation to support the higher level of activity. Otherwise, the economy has to contact to conform and pretty soon, the dreaded liquidity trap snaps shut and 2008 deja comes into vue.
Yeah, economics in general is weird. I can largely follow the reasoning of the prevailing theories in broad strokes but it's the minutiae that's a complete mishmash that breaks my brain due to the layers of complexity.
All models wrong, some useful meme applies. As does when you’re a hammer, every problem looks like a nail (monetary policy). Often overlooked is that there is a target rate of inflation, 2%, based on the view that an expanding economy means more transactions needing more money in circulation to support the higher level of activity. Otherwise, the economy has to contact to conform and pretty soon, the dreaded liquidity trap snaps shut and 2008 deja comes into vue.
Yeah, economics in general is weird. I can largely follow the reasoning of the prevailing theories in broad strokes but it's the minutiae that's a complete mishmash that breaks my brain due to the layers of complexity.