June 12, 2019

Monetary Policy Informed by Fear!

Antonio Fatas writes “This time might not be different”: The US does not seem to be able to sustain a low unemployment rate. Once we reach “full employment” (or even before), unemployment bounces back as we hit a turning point. I have written about this pattern in my previous post: All cycles display a V-shape evolution for unemployment. Unemployment reaches its lowest point around 12 months before the recession and, in most cases, unemployment is already increasing in the months preceding the recession. What is interesting is the absence of a single episode of stable low unemployment (or full employment). It… Read More

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