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Robert Gordon on reasoning from a price change

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[unable to retrieve full-text content]One common theme that runs through both my blogging and my academic research is that economists need to avoid “reasoning from a price change”. Matt Yglesias directed me to an old Robert Gordon paper that criticizes modern New Keynesian DSGE models. Gordon also emphasizes the need to avoid reasoning from a price change: An explanation […]

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One common theme that runs through both my blogging and my academic research is that economists need to avoid “reasoning from a price change”. Matt Yglesias directed me to an old Robert Gordon paper that criticizes modern New Keynesian DSGE models. Gordon also emphasizes the need to avoid reasoning from a price change: An explanation […]
Scott Sumner
Scott B. Sumner is Research Fellow at the Independent Institute, the Director of the Program on Monetary Policy at the Mercatus Center at George Mason University and an economist who teaches at Bentley University in Waltham, Massachusetts. His economics blog, The Money Illusion, popularized the idea of nominal GDP targeting, which says that the Fed should target nominal GDP—i.e., real GDP growth plus the rate of inflation—to better "induce the correct level of business investment".

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