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Peak Inflation Sightings Are False Dawn As Hawks Circle
There were two ostensible "peak inflation" sightings on Thursday, but I'd be inclined to call them f
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I am probably either ignorant or somehow biased, but I am puzzled why a tiny country with more sheep than people is suddenly such an economic bellwether. Australia I can understand but NZ, not so much.
You should check out their wines.
I love NZ whites better than US and Aussie reds. Some very nice stuff.
I see that the St Louis Rooster is squawking again today. Based on the Taylor “Rule”? Rule? Really?
A recent story in the Science & Technology section about particle physics. The relevant point is that the Standard Model of Particle Physics, which was published in 1973, still cannot explain many phenomenon. Forgive me, but I believe that physics is much more of a quantifiable real science as opposed to economics which is far from being anything close to a science. Yet Fed officials are wedded to the models and theories they learned in grad school.
A few years working outside of academia before parachuting into the Fed would do them some good.
We’re getting there! They are already driving by homeless people and noticing them. It’s not much, but it’s a start towards real world contact.
These folks create the models and are the best quantitative analysis around. The models capture all lessons learned from the past and get updated with every new data point.
They can’t predict all economic phenomena because all phenomena hasn’t happened. However, they do have some predictive power, and that’s why the time between economic crises has been increasing. They ensure past mistakes aren’t repeated, and that ensures progress.
Having these central bankers beats having people who set policy based on their gut, a-la Turkey.
Also, you’re citing some back-of-the-envelope model. It’s like complaining that your F=m*a can’t explain Pluto’s orbit (you need relativity for that). You bet central bankers aren’t relying on the Taylor rule equations for policy: they have teams of analysts.
What they talk about in public is meant for traders and arm-chair economists to communicate a sense of where policy might be going. Remember they need to scare traders if we’re to tighten financial conditions without a major crash. If they really explained things in detail they would be criticized as being wonks.