Fed considered extreme measures

[Brad DeLong]

>Bradford DeLong wrote:
>
>>Was it really a full decade ago that Larry Summers and I wrote 
>>about how it would be unwise to push trend inflation far below five 
>>percent because of the danger that one might then find that a 
>>single adverse shock would get the economy wedged into such an 
>>unpleasant position?
>
>5%? My god, that seems almost Weimarish these days.
>
>What about the absence of inflation making it difficult to cut real 
>wages? Is that part of the unpleasantry?
>
>Doug

Nah. Kalecki thought that labor unions and workers were too dumb to 
notice that they needed cost-of-living increases. We think they're 
smarter...

Brad DeLong