top of page
Search
  • Writer's pictureJoe Carson

Letters to Editor, WSJ 1/14/2020

Updated: Jan 20, 2020

Mr. Blinder is correct to call out the absurdity surrounding the notion that policy makers are “failing” in their inflation objective of 2% with the latest inflation reading of 1.7%. Yet Mr. Blinder’s criticism does not go far enough. The Fed’s inflation target is based on a price gauge in which only 70% of the index is based on prices that consumers actually experience; the remainder involves business prices or nonmarket prices. Conceptually correct and statistically accurate price measurement is fundamental to monetary-policy decisions, yet policy makers pin their rate decisions on a price index that only they use. Perhaps the real problem with the inflation objective is the gauge, and not the target itself.

Joseph Carson

Westport, Conn.

Mr. Carson is a former AllianceBernstein chief economist.


10 views0 comments

Recent Posts

See All

The Politics of Inflation & The Fed

What is inflation? That should be easy to answer. Inflation should be what people pay for things. However, politics and policy got involved, making things complex and confusing. The government told on

How Fast Are Labor Costs Rising? Faster Than You Think

The widely followed employment cost index (ECI) jumped 1.2% in Q1 2024, faster than the 0.9% increase in Q4 2023, raising fears that labor costs are re-accelerating. As big as the jump in the ECI was

Comments


bottom of page