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by xapata 1360 days ago
Not shrink. Slow the growth of. Decelerate is different from stop.

The real problem isn't any particular position, velocity, nor even acceleration. Those can all be planned for. It's the 4th time-derivative, jerk, that messes us up.
2 comments
slg 1360 days ago
That is a semantic debate on whether we cross an axis on a graph and we won't know whether that will happen until after the fact.

We are intervening to make the economy smaller than if we didn't intervene. I think that qualifies as "shrinking" even if the growth is what is shrinking and not the overall economy.

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xapata 1360 days ago
> We are intervening to make the economy smaller than if we didn't intervene.

Depends on what time scale we're thinking about. True in the short-term, but I think the long-term expectation is that growth will be more stable, and therefore greater, with this short-term intervention.

> I think that qualifies as "shrinking"

Yes, and no. Yes, in that oh-so-important technical, relative sense. No, in that it's not the best choice of words.

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caeril 1360 days ago
> Those can all be planned for.

Literally nothing can be planned for. Compare the Fed dot plots at any given meeting since 2008 with actual rates a year, or three years hence. Look at the BoE and BoJ flail wildly around right now, absolutely shocked by the consequences of their own actions less than a year ago.

These people have arguably a worse predictive ability than the canonical South Park Chicken ritual.

Central Banking is the only industry I know of in which you can be catastrophically wrong, always, and retain job security. Great gig, if you can swing it.

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