One of the cautionary tales from Japan is that structural reforms are often necessary alongside stimulus. Another is that abandoning monetary expansion while deflation looms is foolish. And all the structural reform in the world would do no good if the Fed triggered a sharp decline in demand by hiking rates 2%.
How can one restructure an economy while encouraging consumers to buy yesterday's goods? Loading up on yesterday's technology causes deflation when tomorrow's technology is on the shelves.
And raising interest rates may mean looser money as investors locate real growth to match real yield. Getting the yield accurate means safer investing.
I might point out, in general, economists who do the Taylor rule, then get impossible results, then blame the economy cause their math don't work, well, those are nutty economists.
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