JPJ writes: I ran across the following today while studying for my Course 2actuarial exam:”…to keep the unemployment rate below the natural rate requires an increasing expansionary stimulus and a continuously-rising inflation rate….If the public is well-informed about the economic structure, economic conditions, and policy goals, it will be able to forecast the inflation rate. That makes it impossible to set a policy that makes the unemployment rate differ systematically from the natural rate….Only by systematically fooling the public can policy-makers force the unemployment rate to deviate from the natural equilibrium.”_Macroeconomics_ by Paul Wachtel; pp. 91, 93. (1997: the Society of Actuaries)
It was chilling to have my rising suspicions about our current over-the-barrel state confirmed by a seven-year-old monograph in basic macro theory! Yet more justification for the belief that our “leaders” have leveraged their political capital – in the form of artificially low unemployment rates – on the backs of my children.
Sure, you can believe the official inflation and unemployment figures. And while you’re at it, you might as well believe in Santa Claus, the Tooth Fairy, and really hot women who pursue unsuspecting men and initiate sex with them out of the blue. Okay, this is bit of a tangent, but have you ever noticed that women do all the pursuing and initiating in modern literature? This is contrary to classic literature where men actually pursue women, not to mention every real nightclub scene I’ve ever seen.