Re: Raul Paul Roasts Bernanke
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Borodog,
In his Senate and House speech, I think Bernanke kept on emphasizing that the Fed does pay attention to headline inflation. The reason they focus on headline inflation, the argument goes, is that that's the only type of inflation they feel they Federal Reserve has the power to control. If food and energy are volatile in a short time range, then monetary policy can't do anyting to fix them - and they could stem from supply shocks (which we can't really control) rather than increased demand (which sorta can)
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Right. Trying to come up with one number that is "inflation" is a quixotic quest. There might be one formulation that's most useful for monetary policy, one that's best for calculating COL increases, one that's best for deflating GDP, and one that's best for Austrian economic theorists, and they all might be different.
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