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Re: Re: Re: Re: Brad DeLong's column



(BTW, before I start my diatribe, notice that higher interest rates
(Brad's topic) are not the same thing as "crowding out" of private
investment (Mat's topic). This is especially true because government
deficits encourage private spending via the accelerator effect.)


Very true...


In the early 1980s, the Fed wasn't targeting real GDP. Rather, it
was trying to break the back of inflation (and indirectly, that of
the working class).


Correct. But starting in 1984 or so they *were* trying to target real GDP...

In the process, the second problem with Brad's riposte was revealed,
i.e., the assumption that the Fed has the _power_ to target real GDP.


They think they do (albeit imperfectly, with substantial errors)....

Brad DeLong


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