{"id":46617,"date":"2009-11-21T15:33:13","date_gmt":"2009-11-21T20:33:13","guid":{"rendered":"http:\/\/www.businessinsider.com\/the-output-gap-model-fatally-flawed-2009-11"},"modified":"2009-11-21T15:33:13","modified_gmt":"2009-11-21T20:33:13","slug":"the-output-gap-model-fatally-flawed","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/46617","title":{"rendered":"The Output Gap Model: Fatally Flawed"},"content":{"rendered":"<p>Could it be that the fundamental economic indicator that is <a href=\"http:\/\/www.zerohedge.com\/article\/goldman-increases-ten-year-deficit-estimate-105-9-trillion-sees-output-gap-10\">gospel not only to Goldman Sachs<\/a>, but to <a href=\"http:\/\/online.wsj.com\/article\/SB124571683373339299.html\">Ben Bernanke in estimating and determining monetary policy<\/a>, the <strong>output gap<\/strong>, provides a flawed reading of the economy? As a reminder, Ben Bernanke has repeatedly expressed little regard for either commodity inflation or US dollar exchange as having an impact on overall US inflation. As <a href=\"http:\/\/www.atimes.com\/atimes\/Global_Economy\/KG01Dj02.html\">Askari and Hochain state<\/a>: &#8220;according to [Bernanke&#8217;s] theory, inflation was related only to the output gap. <strong>As long as the output gap was negative, that is, if actual gross domestic product was below potential GDP, the economy was at no risk of inflation. <\/strong>Hence, he  \t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\targued that the central bank had to adopt an aggressive money policy until the  \t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\toutput gap closed.<\/p>\n<h2><a href=\"http:\/\/www.zerohedge.com\/article\/why-output-gap-inflation-model-may-be-fatally-flawed\"><strong>Read the whole thing at Zero Hedge &gt;&gt;<\/strong><\/a><\/h2>\n<p><a href=\"http:\/\/www.businessinsider.com\/the-output-gap-model-fatally-flawed-2009-11#comments\">Join the conversation about this story &#187;<\/a><\/p>\n<p><b>See Also:<\/b><\/p>\n<ul>\n<li><a href=\"http:\/\/www.businessinsider.com\/fed-governor-slams-krugmans-output-gap-argument-2009-10\">Fed Governor Slams Krugman&#8217;s &quot;Output Gap&quot; Argument<\/a><\/li>\n<li><a href=\"http:\/\/www.businessinsider.com\/can-someone-explain-paul-krugmans-output-gap-chart-2009-9\">Can Someone Explain Paul Krugman&#8217;s &quot;Output Gap&quot; Chart?<\/a><\/li>\n<li><a href=\"http:\/\/www.businessinsider.com\/were-in-the-final-month-before-inflation-hits-2009-11\">We&#8217;re In The Final Month Before Inflation Hits<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Could it be that the fundamental economic indicator that is gospel not only to Goldman Sachs, but to Ben Bernanke in estimating and determining monetary policy, the output gap, provides a flawed reading of the economy? As a reminder, Ben Bernanke has repeatedly expressed little regard for either commodity inflation or US dollar exchange as [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-46617","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/46617","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=46617"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/46617\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=46617"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=46617"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=46617"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}