Re: Interest rates, Inflation etc.

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

On Mon, 4 Dec 2000, John Vertegaal wrote:
> For whatever it's worth, my take on this interesting and I
> believe important debate is that the heterodox and mainstream
> literature you invoke are both based on an economy in GE
> (i.e. subject to a set of determinate equations) over the
> period in question.

Hi John,

As long as you mean this in the broadest sense
---so that, for example, it encompasses the PK
conflicting claims models---you are right.
However I do not think anything hangs on it.
Disequilibrium models will give the same result,
and when tested will draw the same conclusion
from the data. The whole point of referring to
the crude regression I suggested to the list
is so that *anyone* on this list, as long as
they can access a spreadsheet, could take a look
for themselves:  No econometric background is
required. The persistence of macroeconomic
structure, such as the diffusion of interest rate
effects into the economy, of course deserves much
more careful consideration and treatment.
And the simple regression I suggested requires much
refinement before it can be taken at all seriously,
even as a window on the data.
(I can send you an example if you like.)

Alan