Morning Must-Read: Pedro Nicolaci da Costa: On Larry Ball and Sub-5% Unemployment

Pedro Nicolaci Da Costa: On Larry Ball and Sub-5% Unemployment: “The Federal Reserve should hold short-term interest rates near zero long enough to drive unemployment well below 5%, even if it means letting inflation exceed the central bank’s 2% target… according to Laurence Ball….

…That could help bring some discouraged workers to reenter the labor market, as well as help the long-term unemployed find work and involuntary part-time workers find full-time jobs, he said…. Mr. Ball… argues that the Fed would have a much easier time raising interest rates to fight modest inflation than it would battling persistently low inflation or deflation with rates already close to zero…

April 1, 2015

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