Thursday, February 5, 2015

What happens when Keynesians get their target inflation?

As we can see here, the blue line, inflation, jumps up and we crash and unemployment shoots up like a rocket. Note that this has happened in four of the last four recessions.

That would be government in DC, just at the election,  suddenly hitting the economy with all the spending obligations it incurred.  They crowd out and folks have to get up off the couch and look for a job.

Pure in simple, the obvious explanation for the natural rate of unemployment. 

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