Run the Economy Extra-Hot
Run the Economy Extra-Hot
Unemployment rate down to near 4%.Maybe economy can't accommodate more workers without zooming out of control.We see economy that is well below its long-term trend.Phenomenon known as hysteresis.Solution suggested,was to run economy hot.Means allowing unemployment rate to fall below level that economists usually associate with full employment & stable inflation,extra-tight labor market would draw talented workers off sidelines & back to jobs.
Ref. : https://www.bloomberg.com/view/articles/2018-02-14/run-the-economy-extra-hot
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