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Fed Confronts an Economy Plagued by Mismeasurement
A note from Goldman Sachs economist Jan Hatzius this weekend touches on a theme that seems to be getting a lot of play of late in the world of central banking: Mismeasurement. Do we really know the world economists are trying to describe to us on a daily basis? And if we don’t, are central bankers in any position to feed this world appropriate amounts of money and interest? Goldman’s note raises questions about measurement of productivity, growth and inflation. “Structural changes in the US economy may have resulted in a statistical understatement of real (economic) growth,” Mr. Hatzius argues. The data, he ... (full story)