The Fed's Major Problem Is The Simple Ignorance Of Economists
There’s an awful lot of very clever people who do very good work as economists. However, the Federal Reserve’s main problem as we climb back up out of the Great Recession is that there’s still an awful lot that we just don’t know about the economy. What we might call the ignorance of the economists. Just to emphasise, this isn’t claiming that all economists (or even ideologically opposed ones) are idiots or fools, it is simply that the state of the science is that there’s a lot of things we don’t know. In macroeconomics the problem is especially bad: we’re better than chemistry was when it was still considering phlogiston but not as advanced as physics is, say, with nuclear reactions and decay. Which makes this a rather interesting point:
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