In his contribution 'Should Policy Makers Worry about R*?’ [published just as the #FederalFundsRate crosses the R*ubicon @tracyalloway] @Lee_Ohanian argues that the level of R* is actually not that important, ∵ 1)The #PhillipsCurve (both w & w/o #NAIRU) is gone 2)Business cycle pic.twitter.com/N37Th9zano— Satyen Baindur (@Satyen_Baindur) March 13, 2018
...fluctuations r _not_ driven by short-term demand shocks but fiscal/regulatory/technological/demographic 8-50y long cycles. 3)Risk-free bond yields may b low, but returns 2 capital r @ historic highs: ∴ no #SecularStagnation. Govt shd cncrn itslf w longterm growth & investment pic.twitter.com/KmR6noqkw2— Satyen Baindur (@Satyen_Baindur) March 13, 2018
In a companion contribution, Volker Wieland discusses implications of a very low and/or time-varying R* 4 #TaylorRule, including alternative long and/or medium-term averages of R* & #FirstDifferences (not #levels) via @EconomicsOne @HooverInst @stanford https://t.co/Mx9kYCsnQ8— Satyen Baindur (@Satyen_Baindur) March 13, 2018
