saw another econ prof on yt do that flawless demand curve flow and it made me so goddamn uneasy like yeah math can explain price fluctuations but the
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NuclearMole194• 3 karma
5 months ago
What's the most effective monetary policy for stabilizing inflation rates?
I've been reading about the different approaches to monetary policy and I'm having a hard time deciding which one is most effective in stabilizing inflation rates. Some argue that a tight monetary policy, characterized by high interest rates, is the best way to combat inflation, while others claim that a loose monetary policy, with low interest rates, is more effective in stimulating economic growth. But what about the risks of over-tightening or over-loosening? Don't these extreme measures often lead to economic instability?? I'm thinking of the examples of Japan's lost decade and the US's recent quantitative easing measures... what are your thoughts on this? Can we really trust the Phillips curve to guide our monetary policy decisions??
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