The Fed
could try to moderate long-run interest-rate and interest-rate expectations
that the economy can weather rate-hikes in the long-run one its current
growth... without decelerating.... A little higher unemployment rate may save
the economy from overheating... When the neutral real interest-rate has some
positive bias so that the downward pressure on the price-level to make savings
worthwhile... Capitalists earn profits, save and invest; they have a low
propensity to consume... they demand less compared to income... The value of
multiplier would be low... The economy is demand deficient... Since 1970s real
wages have stagnated low even after increase in the economy’s productivity...
Higher real wages would increase domestic demand and income and growth..
The US might target higher real-wages....
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