Well, in Bernanke's defense, Mankiw's version of the Taylor rule would imply a positive rate a bit above 2 with 6.5% unemployment and 2% inflation, so in that sense the policy being described here is a bit more exapnsionary than Greenspan's.
What I'm wondering is, does this really represent a change? And, what's the theory behind it? Why do Blanchard, Bernanke, Krugman, etc. think that demand has fallen so much that with zero interest rates unemployment remains at or above 6.5 percent?
I would say no. My point precisely that even if you want to call a higher inflation target a change (which I wouldn't), this hardly qualifies. It's far from clear that at 6.5% demand pull inflation will kick in. In fact, with the same level of labor force participation as in the late 1990s, now we have considerably more than 7.9% unemployment. Closer to 12% in the last calculations I publish in the blog. So we are really far from full employment indeed.
I mean 7.7%. Oops. But the point remains, a good chunk of the decline in unemployment is due to reduced participation rates.
eu me confundi em algo? ja que na ISLM ha politica de base monetaria nao de taxa de juros, ou seja, se muda a Base monetaria e a taxa de juros "natural" converge para um nivel menor (oferta e demanda) é isso mesmo ou to errado?
Certamente o Hicks (e o Modigliani) tinha uma taxa natural no modelo. Ou seja, fora a possibilidade da taxa ser negativa ou uma armadilha da liquidez, com flexibilidade de precos e salarios o sistema chegaria ao pleno emprego.