Page 18: Chicago economist Gary Becker said: "When you give a lot of discretion to regulators, they don't use the tools that are given to them." What are the tools? Human behavior can never be measured for clarity.
Milton Friedman thought that instead of tweaking interest rates, the FED should just automatically increase the money supply 3% to 4% a year. Money supply is a function and Money stock should be coordinated with credit system. See an article on " Monetary Policy Revisited" published by Atlantic Economic Journal for reference.
Stanford economist John Taylor concocted i.e."Tiao he" in Pin Yin system of romanization. There are three elements such as inflation, current economic growth and long-term trend growth to be churned out as a suggested FED interest rate target. Such approach can hardly be possible with accuracy.
It is to to be known that Economics is a behavioral science and the lifestyle of the people should be taken into consideration plus the lifelong educational endeavor to be stressed as guidelines.
All the assumptions are to be validated by empirical evidence during the course of time but there is always a time lag. This sounds outlandish but it is very true. That is the nature of economics.
Francis Shieh a.k.a. Xie Shihao comparing views with economists for reasonable understanding.(sic)
Wednesday, July 1, 2009 at 3.06 p.m.
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