From: Allin Cottrell (cottrell@wfu.edu)
Date: Tue Nov 23 2004 - 11:04:38 EST
On Mon, 22 Nov 2004, Rakesh Bhandari wrote: > 1. The data reveal that the Fed's rate hikes often cannot be > explained by an attempt to stabilize CPI inflation at a small > positive rate. In fact there are times that rates should have been > reduced rather than raised if Greenspan were really aiming at the > price level rising at a small positive rate. I'm not sure how the data could be said to "reveal" that. Over the last decade, year-on-year CPI inflation has averaged 2.45 percent, with a maximum of 3.36% and a minimum of 1.55% (and with half of the observations lying between 2.19% and 2.82%). This is an extraordinarily consistent "small positive rate". You seem to be saying that a different policy on the part of the Fed would have resulted in greater stability of the time-path of the CPI. That seems very implausible. Allin
This archive was generated by hypermail 2.1.5 : Thu Nov 25 2004 - 00:00:01 EST