Fed Economist Bemoans ‘Criminally Oppressive’ Social Order
- Discussion paper criticizes reliance on inflation expectations
- Author warns of potential for ‘serious policy errors’
This article is for subscribers only.
A senior Federal Reserve economist has slammed the profession for relying on propositions “that ‘everyone knows’ to be true, but that are actually arrant nonsense,” including the role of inflation expectations.
In a discussion paper posted on the Fed Board’s website Friday, Jeremy Rudd argued that ideas including using aggregate production functions to provide a good way to characterize the economy’s supply side don’t have “any sort of empirical foundation.”