Thursday, August 12, 2010

Deflation and Output Gap go together

That is what the Keynesians are teaching me during this latest flair up with the Central Banker. Here is Menzie, and DeLong, and Krugman, of course.

They have not convinced me that inflation leads to growth.  Nor have they convinced me that the Central Banker has the power to "Out Hedge" our creditors.

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