Re: Interest Rates, Inflation, Exchange Rates and Credit inBull And Bear Ma...

["Alan G. Isaac" <aisaac@xxxxxxxxxxxx>]

On Mon, 4 Dec 2000, James Cumes wrote:
> I don't want to get involved in a barren hassle about who's right and
> who's wrong.
> I'm interested only in trying to suggest wise policies to get us out
> of the morass into which anti-inflation policies have led us in the
> past thirty years.

In contrast, I have *not* proposed policy but
have simply proposed looking at the evidence
about how the world works.

> One of our Treasurers declared in 1985 that we were becoming "a banana
> republic." He later became Prime Minister and followed policies of
> which you are such a distinguished advocate.

Again to clarify:   That the Fed *can*
crush inflation from the economy with rate
increases does not imply that it *should*.
In my replies to you,
I have only been making the case that it
*can*, which I feel ought to be obvious to
anyone who learns some basic macroeconomics
(orthodox or heterodox), watches the economy
a bit, or plays with the (readily available) data.
So I have *not* been challenging your policy
recommendations, of which I am ignorant of the
details.

Alan