A Strange Kind Of Goldilocks

By Chandrashekar (Chandra) Tamirisa, (On Twitter) @c_tamirisa

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US economy is in goldilocks.

The three years since 2009 have seen three programs of Quantitative Easing (QE) and each of the years 2010, 2011, and 2012 has logged an annual real growth rate of around 2%. Unemployment has steadily fallen from around 9.8% to 7.5%, approximately at the rate of about 0.2% every 3 months, creating on average about 150,000 jobs every month since January 2010. Inflation has remained in the range of 1% to 2% every year.

The summary is QE, 2% annual real growth rate, steadily declining unemployment and inflation within target.

When viewed from outside the box of conventional monetary policy, one would be compelled to observe that ultra-loose monetary policy may indeed be the neutral rate of interest.


About Chandrashekar (Chandra) Tamirisa

This entry was posted in Economics, Monetary Policy, North America and Caribbean and tagged . Bookmark the permalink.

One Response to A Strange Kind Of Goldilocks

  1. QE has nine lives?

    On Fed policy:

    A wise observation from Neil Irwin of The Washington Post: http://wapo.st/12wmFlz

    FT on QE distortions:

    Robert Samuelson of The Washington Post on unemployment:

    The Atlantic Monthly on Long Term Unemployment

    Washington Post on employment and recovery:
    “job creation in the recovery from the Great Recession has been bottom-heavy. Most of the 165,000 net new jobs that the Labor Department reports were added in April came in low-wage sectors, such as retail, food service and temp work. A study last year by the National Employment Law Project found that low-wage occupations accounted for one in five jobs lost during the recession — but they accounted for three out of five jobs added in the recovery.”

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