What should the Fed mandate be?

myp · Nov 26, 2011

Say you had your optimal system in place for Fed goals. What would it be? Would you stick with the current dual mandate (targeting full employment and price stability) or would you change it to something else? Perhaps the growing idea of ngdp targeting?

Also, feel free to include systemic fiscal changes that accompany your Fed mandate.

David · Nov 26, 2011

myp said:
Say you had your optimal system in place for Fed goals. What would it be? Would you stick with the current dual mandate (targeting full employment and price stability) or would you change it to something else? Perhaps the growing idea of ngdp targeting?

Also, feel free to include systemic fiscal changes that accompany your Fed mandate.

I'd get rid of it.

myp · Nov 26, 2011

David said:
I'd get rid of it.

Who would control the monetary system/policy? Would there be a lender of last resort? If you still want money to be controlled by a form of government, then what should their mandate be?

Genuinely interested.

David · Nov 26, 2011

myp said:
Who would control the monetary system/policy? Would there be a lender of last resort? If you still want money to be controlled by a form of government, then what should their mandate be?

Genuinely interested.

I remind you ha I support a non-monetary economy. You know, sense whatever we want happens in this hypothetical.

CatholicCrusader · Nov 27, 2011

myp said:
Say you had your optimal system in place for Fed goals. What would it be? Would you stick with the current dual mandate (targeting full employment and price stability) or would you change it to something else? Perhaps the growing idea of ngdp targeting?

Also, feel free to include systemic fiscal changes that accompany your Fed mandate.

Just a comment on full employment: That is a fantasy: There can never be fulll employment, and that term should never cross a president's lips.

You will always have the unemployable, be they criminal elements, mentally unstable, or just plain lazy idiots. Also, there will always be numbers of businesses coming and going, and thus always a percentage of people in between jobs. Therefore a target of around 5% or 6% unemployment is what you are actually shooting for.

David · Nov 27, 2011

CatholicCrusader said:
Just a comment on full employment: That is a fantasy: There can never be fulll employment, and that term should never cross a president's lips.

You will always have the unemployable, be they criminal elements, mentally unstable, or just plain lazy idiots. Also, there will always be numbers of businesses coming and going, and thus always a percentage of people in between jobs. Therefore a target of around 5% or 6% unemployment is what you are actually shooting for.

Just because full employment is impossible (short of slavery anyway) doesn't mean you don't aim for it. Always aim as high as you can for the best results. Sort of like asking for $50k more hen a house is worth, you know you'll never get it but yo ask for it anyway so ha after you negotiate 'down' you still end up selling for $15k over. Aiming for 100% employment makes the odds of having low unemployment go up.

CatholicCrusader · Nov 27, 2011

David said:
Just because full employment is impossible (short of slavery anyway) doesn't mean you don't aim for it. Always aim as high as you can for the best results. Sort of like asking for $50k more hen a house is worth, you know you'll never get it but yo ask for it anyway so ha after you negotiate 'down' you still end up selling for $15k over. Aiming for 100% employment makes the odds of having low unemployment go up.

That does not make sense. But I'll tell you what it DOES do: It puts ammunition in the hands of political enemies. "President so-and-so said he wanted full employment but 5% of our people are out of work."

David · Nov 27, 2011

CatholicCrusader said:
That does not make sense. But I'll tell you what it DOES do: It puts ammunition in the hands of political enemies. "President so-and-so said he wanted full employment but 5% of our people are out of work."

Anyone ha tried that coming down from 10.2% unemployment wouldn't be taken seriously by anyone but ideologues. My point stands, aim for 100% get 4%. Aim for 6% and get 7%. Always aim high so as to maximize what you walk away with.

myp · Nov 27, 2011

CatholicCrusader, leave the politics out of it. This is about monetary theory and for once I would like an intellectual discussion. If you can't do that please leave this thread and make your own. Full employment is currently part of the dual mandate for the Federal Reserve which was passed by Congress. I agree that it is unattainable and for good reason because at the least there will always be the transitional unemployed. The Fed realizes that, but that is besides the point.

CatholicCrusader · Nov 27, 2011

myp said:
CatholicCrusader, leave the politics out of it. This is about monetary theory and for once I would like an intellectual discussion............

I did not get into politics: I did not mention a party or person by name. I was merely addressing one item within your post. I correctly said: "There can never be full employment, and that term should never cross a president's lips."

If you find a factual statement to somehow be UN-intellectual, then I don't know what to tell you. And considering that you dropped into MY thread and made a false unprovable statement, I find your indignation a bit hypocritical.

But, I'll get out of your thread. No problemo

myp · Nov 27, 2011

CatholicCrusader said:
I did not get into politics: I did not mention a party or person by name. I was merely addressing one item within your post. I correctly said: "There can never be full employment, and that term should never cross a president's lips."

If you find a factual statement to somehow be UN-intellectual, then I don't know what to tell you. And considering that you dropped into MY thread and made a false unprovable statement, I find your indignation a bit hypocritical.

But, I'll get out of your thread. No problemo

Monetarists know that full employment (under the definition you are using) can't be achieved. That does not need to be said.

dabdab · Nov 28, 2011

I think the monetary management as central bank is enough for them .
any finance and economical aspect has to be handled by other authorities . as for unemployment it is , as many other things ,like poverty , crime ...etc are very complex matters that can't be handled by one government department it require constant monitoring and analysis for deciding to do what and were .

myp · Nov 28, 2011

dabdab said:
I think the monetary management as central bank is enough for them .
any finance and economical aspect has to be handled by other authorities . as for unemployment it is , as many other things ,like poverty , crime ...etc are very complex matters that can't be handled by one government department it require constant monitoring and analysis for deciding to do what and were .

What do you mean by monetary management is enough? Do you mean they should just focus on price stability?

Also, if you believe in stimulus, then monetary stimulus is undoubtedly an option- in other words, monetary policy undoubtedly can affect employment.

dabdab · Nov 28, 2011

myp said:
What do you mean by monetary management is enough? Do you mean they should just focus on price stability?

Also, if you believe in stimulus, then monetary stimulus is undoubtedly an option- in other words, monetary policy undoubtedly can affect employment.

Yes just focus on currency stability and banking regulation . printing more money alone , only make it worse . some time it is the only thing a government can do .but I think it is the worst tool to provide stimulus money there has to be a different department that handle finance and anoher to handle the economy policy more importantly how to manage the economy is the important aspect . it is my belief that the problem is always ether mismanagement , less management or a need to adjustment . I 'm of the idea of long term economical planing planing .using the market as an effective managed tool . also I believe the main real source of wealth is the people as much as they are the source of poverty so mainlining a healthy and potentially productive population is a key point it is as important as a good infrastructure . for finance I would go for borrowing locally along tax or tariffs and fees . as little as possible of any one of them .

What should the Fed mandate be?

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