Agree with you tha JP & SS are wrong. On the other hand, the "pursuit of unknows" like r*, y* or u* makes for massive errors! This quote from DeLong is telling:
"I suspect that the Fed is profoundly uncomfortable with interest rates substantially above what it confidently believes the neutral rate to be, especially now that inflation is very close to its 2% target. But it will not dare to shift out of reverse until it sees signs of slower job growth."
I don't follow the numerical reasoning, but I share your qualitative conclusion. We are near equilibrium. But it will be equilibrium [pace Brad DeLong] at a higher r* than previously.
I'd like to see your comments on S Sumner's "Power Is Wrong ...." over at Econlog. I think both Powell AND Sumner are wrong. :)
Agree with you tha JP & SS are wrong. On the other hand, the "pursuit of unknows" like r*, y* or u* makes for massive errors! This quote from DeLong is telling:
"I suspect that the Fed is profoundly uncomfortable with interest rates substantially above what it confidently believes the neutral rate to be, especially now that inflation is very close to its 2% target. But it will not dare to shift out of reverse until it sees signs of slower job growth."
The labor mkt is a wrong & misleading focus!
I don't follow the numerical reasoning, but I share your qualitative conclusion. We are near equilibrium. But it will be equilibrium [pace Brad DeLong] at a higher r* than previously.
I'd like to see your comments on S Sumner's "Power Is Wrong ...." over at Econlog. I think both Powell AND Sumner are wrong. :)