Evening Must-Read: Jared Bernstein: Fed Vice-Chair Stan Fischer on Whether Stronger Actual Growth Can Boost Potential Growth

Jared Bernstein: Fed Vice-Chair Stan Fischer on Whether Stronger Actual Growth Can Boost Potential Growth: “Stan poses the right question…

…this part of his answer is particularly important[:]… ‘There are good reasons to believe that some of the surprising weakness in labor force participation reflects still poor cyclical conditions…. It may also be possible to reverse or prevent declines from becoming permanent through expansive macroeconomic policies.’… The implication for current policy is clear: we need to run a high-pressure economy for a while not just to close existing output gaps but to increase potential growth by pulling more people and capital investment back into the economy…

August 11, 2014

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