Rajan doesn’t believe that there would be a LT boost in AD if the Fed pursued a more aggressive and higher inflation target. Yes, higher inflation is a burden on savers and a relief for debtors, but who saves anymore?
“The economy’s not a class you can master in college, to think otherwise is the pretense of knowledge.” — EconTalk on Hayak
“How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of otters, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it.” — Adam Smith - The Theory of Moral Sentiment
“Look at America’s professional elites…who once formed a kind of local aristocracy with duties and responsibilities toward their towns and cities. They have lost their prestige and public purpose, becoming anxious hustlers…The forces that guided democracy are quickly being eroded.” — The Future of Freedom, p. 23 - Zakaria