Washington, Sep 10 (Ians) The ‘scariest economics paper of 2022’ has warned that a high unemployment rate will be necessary to combat inflation and to bring inflation down to 2 per cent, the US may need to tolerate unemployment of 6.5 per cent for at least two years.
The paper from the Brookings Institution by Johns Hopkins macroeconomist Larry Ball with co-authors Daniel Leigh and Prachi Mishra of the International Monetary Fund (Imf) found that “this unemployment path returns inflation to near the Fed’s target only under optimistic assumptions”.
“Under less benign assumptions about these factors, the inflation rate remains well above target unless unemployment rises by more than the Fed projects,” the paper said.
In a following opinion piece in The Wall Street Journal, Jason Furman, former chairman of the White House Council of Economic Advisers under President Obama, called this “the scariest economic paper of 2022”.
Based on Brookings’ findings, the Fed...
The paper from the Brookings Institution by Johns Hopkins macroeconomist Larry Ball with co-authors Daniel Leigh and Prachi Mishra of the International Monetary Fund (Imf) found that “this unemployment path returns inflation to near the Fed’s target only under optimistic assumptions”.
“Under less benign assumptions about these factors, the inflation rate remains well above target unless unemployment rises by more than the Fed projects,” the paper said.
In a following opinion piece in The Wall Street Journal, Jason Furman, former chairman of the White House Council of Economic Advisers under President Obama, called this “the scariest economic paper of 2022”.
Based on Brookings’ findings, the Fed...
- 9/10/2022
- by Glamsham Bureau
- GlamSham
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