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Tag Archives: Phillips Curve

A Full-Employment Recession: Post-WWII Growth Model Flawed

There were three big interrelated economic events at the end of October. We had the first pass at Q3 GDP, followed by the Fed meeting (another reduction in the Fed Funds Rate), and the week ended with a much stronger than anticipated jobs report. The data continue to imply that the traditionally accepted post-WWII growth model (emphasis on positive aggregate GDP growth) is no longer applicable, and policies based on it …Read More

The Fed and the Phillips Curve

Deflation is the Order of the Day The Fed was established in December, 1913 after the Panic of 1907 (the latest in a series of financial panics dating back to the middle of the 19th century) put the economy into a severe recession via bank runs and subsequent bank failures.  The Fed’s original purpose was to provide the nation with a safer, more flexible, and more stable monetary and financial …Read More