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On Plenitude

What next?

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“The Federal Reserve is setting out to do something it has never accomplished before: reduce inflation a lot [four percentage points] without significantly raising unemployment [thereby creating a recession].” So wrote veteran economics reporters Jon Hilsenrath and Nick Timiraos in The Wall Street Journal last week, They backed up their story with concise narratives of four episodes of monetary policy to subdue rising prices undertaken since 1948, selected from studies of seven undertaken since 1942. The varieties of experience they represent are illustrated by charts showing the results of the measures taken – unemployment rates (three-month average) plotted against changes