On Sat, 6 Jan 2001, Doug Henwood wrote:
> >Interesting. So if we extrapolate from this, whether there was a surplus
> >or deficit never entered into Greespan's thinking when he made this
> >crucial decision to loosen? So the association of looser policy and
> >surpluses is completely accidental?
>
> I wouldn't say completely accidental; no doubt they were a
> contributing factor. But his fear of deflation is what pushed him to
> dump NAIRU.
So what do you make of this famous scene in Woodward's Agenda _where_ the Administration and the Fed make a deal, surpluses for looser policy? Mainly guff, you think? I think Brad de Long vouched for it in one of his newsletters.
Michael
__________________________________________________________________________ Michael Pollak................New York City..............mpollak at panix.com