Paul Krugmans The Accidental Theorist :: Federal Reserve Monetary Policy

Paul Krugmans The Accidental TheoristIn the piece entitle Four Percent Follies from The Accidental Theorist Krugman discusses how some people regain Alan Greenspan should let the parsimoniousness grow faster. Four Percenters, those against Greenspan, feel that he is not putting enough cash into circulation therefore slowing growth. If more notes is put into the economy then it go forth grow faster but if besides much is put in, swelling will occur. Also, they feel that this will remedy the low rate of unemployment which will soon cause inflation to spiral upward if it continues to decrease below the standard 6%. tenner Smith would surely understand the Four Percenters plea. He would privation the economy to be free from also much presidential term control. Greenspan is abusing his lieu and should let the currency scat into the market rather then exert back. Sure, Smith would say some mediation is necessary to keep too much money from pouring in so inflation doesnt occur. Smith believes that the economy should be free from the g everyplacenment yet the government should still silently oversee it to prevent any problems. Greenspan is preventing problems but is universe too cautious and Smith would want him to let more currency into our market but still keep it from getting out of control. My pick up on this matter is quite similar to that of Adam Smiths view on the matter. I also feel that an economy should be allowed to flourish and grow to its fullest capacity. As the article illustrates, inserting more money into the economy will certainly cause the economy to grow and also encourage fix the unemployment rate. So I feel that Greenspan should loosen his control over the money and let more currency be distributed into the economy. But I also feel that it is very important that Greenspan maintains a watchful kernel over this inserting of money into the economy. His job is to keep the economy prosperous and safe. So while he must let m ore money flow he still must be sure to keep too much money from entering our market.