- Fed needs to take strong action now; should seriously consider easing policy significantly
- If it were possible, would cut Fed funds target several percentage points
- Fed could use price-level targeting or peg policy to GDP
- Unemployment so far above natural rate is should put our hair on fire
- 2% inflation target an average, not a cap; No horror if rises above 2% temporarily
“If we had a short-term interest rate, we’d cut it several percent…”
Well mate, ya don’t. Sorta like pushing on a string, innit?
