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Obsolete Dogma: The Don Quixote Economics of the Fed Dissenters

The scary thing is that Dudley is the only bank president who votes with Bernanke on the FOMC these days:

Obsolete Dogma: The Don Quixote Economics of the Fed Dissenters: Confronted with subdued inflation expectations and a deteriorating jobs market, the Fed dissenters insist that the reverse is true. This is Don Quixote economics: waging war on imaginary problems while real ones persist unabated. It reflects little more than irrational angst over unconventional monetary policy, coupled with a misplaced conviction that any uptick in inflation augurs the return of stagflation. Regrettably, empirical evidence will not convince the inflation hawks that it is not 1980, nor will the continuing jobs crisis move them to act. As long as inflation runs between 1-2%, they consider it mission accomplished. Meanwhile, the economy is falling even further below its long-term trend.

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