I keep reading about this concept in the news. From what I understand it means stimulating the economy even when it growing. Is that right? What’s the benefit?
In: Economics
It means running the economy until we start to see enough inflation which causes the Fed to increase interest rates.
This is how the Fed used to run the economy in the 80s, 90s and early 00s and everything was fine.
Since the financial crisis of 2007-2008, there has been a fear of running the economy hot again. So we’ve been running with lower employment for a long time.
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