Monday, August 07, 2006

What would happen if the Fed were targeting unit labor costs?

…as it should

For one thing, people like me wouldn’t be so panicked about stagflation right now. When you hear about the CPI and the PCE deflator, things look bad, but when you look at unit labor costs, it’s just another ordinary day. I reserve judgment, though, on whether we’ll be panicked tomorrow morning, when the second quarter productivity report comes out.

Also, people like Brad DeLong wouldn’t be so worried about import prices. Import prices don’t directly influence US labor costs, and presumably, if the Fed made a credible commitment to stabilizing labor costs, then workers would see that it is not in their interests to demand pay raises to compensate for import price increases.

Incidentally, the Fed might have started to tighten more quickly during the early part of 2005, after a couple of unpleasant unit labor cost numbers came out. In retrospect, that would have been a good time to tighten. However, the Fed might also have recognized that those numbers were just temporary problems. The subsequent inflation problems seem to be for different reasons (rising oil prices, mostly).

To put things in perspective, here is a chart of smoothed unit labor cost growth. (I used a logarithmic growth rate and chose an exponential smoothing parameter to maximize predictive accuracy at a 4-quarter horizon.)

Historically, things start to get ugly in 1969, with a breakout above 3%; they get uglier in 1974 with a breakout above 5%, and uglier still in 1979 with a breakout above 7%. Today, however, nothing unpleasant seems to be going on: this series remains near the bottom end of its historical range. (The situation may change tomorrow, but, given my smoothing parameter, the change is unlikely to be dramatic.) So, what would happen if the fed were targeting unit labor costs? Well, if the target growth range were 1% to 2% (as contemporary opinion suggests it might be), then we would congratulate the Fed for doing such a good job.

Labels: , , , , ,


Blogger spencer said...

Very good.

Mon Aug 07, 09:49:00 AM EDT  
Anonymous Anonymous said...







Wed Jan 14, 08:39:00 AM EST  
Anonymous Anonymous said...


Wed Apr 01, 10:39:00 AM EDT  
Anonymous Anonymous said...

酒店喝酒,禮服店,酒店小姐,酒店領檯,便服店,鋼琴酒吧,酒店兼職,酒店兼差,酒店打工,伴唱小姐,暑假打工,酒店上班,酒店兼職,ktv酒店,酒店,酒店公關,酒店兼差,酒店上班,酒店打工,禮服酒店,禮服店,酒店小姐,酒店兼差,暑假打工,酒店經紀,台北酒店,禮服店 ,酒店小姐,酒店經紀,酒店兼差,寒假打工,酒店小姐,台北酒店,禮服店 ,酒店小姐,酒店經紀,酒店兼差,暑假打工,酒店小姐,台北酒店,禮服店 ,酒店小姐,酒店經紀,酒店兼差,寒假打工,台北酒店,禮服店 ,酒店小姐,酒店經紀,酒店兼差,暑假打工,酒店小姐,台北酒店,禮服店 ,酒店小姐,酒店兼差,暑假打工,酒店小姐,台北酒店,禮服店 ,酒店小姐,酒店經紀,酒店兼差,寒假打工,酒店小姐,台北酒店,禮服店 ,酒店小姐,酒店經紀,酒店兼差,暑假打工,酒店小姐,台北酒店,禮服店 ,酒店小姐,酒店經紀,酒店兼差,寒假打工,酒店小姐,台北酒店,禮服店 ,酒店小姐,酒店經紀,酒店兼差,暑假打工,酒店小姐,禮服店 ,酒店小姐,酒店經紀,酒店兼差,寒假打工,酒店小姐,禮服店 ,酒店小姐,酒店經紀,酒店兼差,暑假打工,酒店小姐,禮服店 ,酒店小姐,酒店經紀,酒店兼差,寒假打工,酒店小姐,禮服店 ,酒店小姐,酒店經紀,酒店兼差,暑假打工,酒店小姐,酒店傳播,酒店經紀人,酒店,酒店,酒店,酒店 ,禮服店 , 酒店小姐,酒店經紀,酒店兼差,暑假打工,招待所,酒店小姐,酒店兼差,寒假打工,酒店上班,暑假打工,酒店公關,酒店兼職,禮服店 , 酒店小姐 ,酒店經紀 ,酒店兼差,暑假打工,酒店,酒店,酒店經紀,酒店領檯 ,禮服店 ,酒店小姐 ,酒店經紀 ,酒店兼差,暑假打工, 酒店上班,禮服店 ,酒店小姐 ,酒店經紀 ,酒店兼差,暑假打工, 酒店上班,禮服店 ,酒店小姐 ,酒店經紀 ,酒店兼差,暑假打工, 酒店上班,酒店經紀,酒店經紀,酒店經紀

Tue Apr 21, 07:09:00 PM EDT  
Anonymous Anonymous said...

Some new style Puma Speed is in fashion this year. chaussure puma is Puma Shoes in french. Many france like seach “chaussure sport” by the internet when they need buy the Puma shoes or buy the nike max shoes.The information age is really convenient. By the way ,the puma CAT is really good chaussures puma ,don’t forget buy the puma mens shoes and nike air max ltd by the internet when you need them . Do you know Nike Air Shoes is a best Air Shoes .

Spring is coming, and how to choose the polo shirts is the main concern of many people. ralph lauren polo shirts is a classic type and reliable. ed hardy clothing is more in line with the aesthetic ideas of young people, so many young people filled with a variety of ed hardy clothes in their wardrobes. New style ed hardy womens shirt match the new style ed hardy sunglasses , it is a good idea.
Do you think this season is not for ugg boots ? maybe yes .but this season is best time that can buy the cheap ugg boots. Many sellers are selling discounted. Do not miss . Please view my blog and fc2 blog .thank you .

Tue May 19, 05:16:00 AM EDT  
Anonymous Anonymous said...

Microsoft Office
Office 2010
Microsoft Office 2010
Office 2010 key
Office 2010 download
Office 2010 Professional
Microsoft outlook
Outlook 2010
Windows 7
Microsoft outlook 2010

Tue Nov 02, 01:56:00 AM EDT  
Blogger yanmaneee said...

kyrie 7 shoes
air jordan
off white clothing
kd 10
supreme new york
curry 7
off white nike
bape hoodie
jordan 6
kyrie 6

Mon Jul 12, 08:55:00 AM EDT  

Post a Comment

<< Home