Raising rates aren’t the only way to solve the problem of (a) people who could be in the labour market but aren’t and (b) insufficient labour in the places it needs to be.
Whatever it’s trying to do, it got me thinking about barriers to hiring in New York City. Are there steps we could eliminate or consolidate? Last week’s primary just saw my former bartender and taco server effectively become a Congresswoman for Queens. An article about the central bank and unemployment would not have prompted me to consider discussing this with her.
Why not discuss it with her?
I would have never tried the pastrami taco if it hadn’t been for her!
> Why not discuss it with her?
She’s campaigning. Not sure distractions would help. In any case, these sorts of proposals benefit from specificity. Next steps are doing homework and proposing specific rule changes.
Let’s not take pastrami tacos for granted.
They’re actually a brilliant fusion of American Hispanic and American Jewish traditions. As it happens, her district has prominent populations of each.
https://www.washingtonpost.com/politics/2018/live-updates/mi...
The part where someone has to compete for ultra-scarce housing in and around NYC.
Source? (Genuinely curious.)
Based on the wealth and income demographics of her community, democratic socialist policies would be net benefit.
You may dimly recall from your undergraduate Macro courses a relationship between unemployment and inflation called the Phillips Curve [0], which is used to evaluate one of the "dual mandates" the Fed tries to fulfill with its interest rate setting policy.
The problem, of course, is that there is evidence from the Fed's own research that suggests that the Phillips Curve is balderdash [1]. That doesn't stop central banks (including the Fed) from pretending it's still true, though.
[0] https://en.wikipedia.org/wiki/Phillips_curve
[1] https://www.philadelphiafed.org/-/media/research-and-data/pu...
I can’t recall a major central bank basing a policy decision on the Philip’s Curve since the 1970s.
12:29 pm
The Philips Curve is alive, [Federal Reserve Chair Janet] Yellen says.
So the Philips Curve posits that there is a relationship between the degree of slack in the labor market and inflation, and it is an empirical relationship that, while not absolutely tight, has been a consistent relationship over time, and I believe that relationship still holds.
https://www.c-span.org/video/?406675-1/federal-reserve-chair...
> there's considerable support for the idea that an inverse relationship between unemployment and inflation exists at least in the short run
Would you care to cite some? I'm certainly familiar with the post-70's forms of Phillips Curve theory (it's discussed in the very Wikipedia article I linked). But I also cited a 2017 paper from the Philadelphia Fed that looked very hard for such a relationship and couldn't find one, and which itself cites prior research going back to 2001 that agrees.
Is it telling me that when unemployment is low, central bank policy is to raise interest rates? If so, why not say that? What I meant is that generally I don't see how the sentences in this article add up to .. an article. It's a bunch of metrics, chosen by convention, expressed in cliche. It kind of sounds like it's telling us a theory or opinion about something, but it isn't really.