From the inflation hawks who warned against government stimulus programs to the progressives who decried the Federal Reserve’s interest-rate hikes, pretty much everyone has misunderstood recent US macroeconomic indicators. To see what is really going on, we need to dispense with defunct models and orthodox assumptions.
AUSTIN – Back in 2021 and early 2022, a posse of prominent economists – including Lawrence H. Summers, Jason Furman, and Kenneth Rogoff, all of Harvard – criticized the Biden administration’s fiscal and investment program, and pressured the US Federal Reserve to raise interest rates. Their argument was that inflation, fueled by federal spending, would prove “persistent,” requiring a sustained shift to austerity. Unemployment, sadly, would have to rise to at least 6.5% for several years, according to one study touted by Furman.
AUSTIN – Back in 2021 and early 2022, a posse of prominent economists – including Lawrence H. Summers, Jason Furman, and Kenneth Rogoff, all of Harvard – criticized the Biden administration’s fiscal and investment program, and pressured the US Federal Reserve to raise interest rates. Their argument was that inflation, fueled by federal spending, would prove “persistent,” requiring a sustained shift to austerity. Unemployment, sadly, would have to rise to at least 6.5% for several years, according to one study touted by Furman.