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Why Does The Fed Want Slower Growth?

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  • L. Randall Wray

Abstract

The Fed has raised interest rates six times in the past year to slow the economy in the belief that unemployment is too low. There is scant evidence, however, that low unemployment leads to inflation, that the economy is in danger of overheating, or that higher interest rates will reduce inflation. Instead, the Fed is merely hastening a downturn that will impose huge costs on society's most disadvantaged.

Suggested Citation

  • L. Randall Wray, "undated". "Why Does The Fed Want Slower Growth?," Economics Policy Note Archive 00-7, Levy Economics Institute.
    • Handle: RePEc:lev:levypn:00-7
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    File URL: https://www.levyinstitute.org/pubs/pn/pn00_7.pdf
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    References listed on IDEAS

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    4. Bruno, Michael & Easterly, William, 1998. "Inflation crises and long-run growth," Journal of Monetary Economics, Elsevier, vol. 41(1), pages 3-26, February.
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    7. Dimitri B. Papadimitriou & L. Randall Wray, "undated". "Targeting Inflation, The Effects of Monetary Policy on the CPI and Its Housing Component," Economics Public Policy Brief Archive ppb_27, Levy Economics Institute.
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