The Federal Reserve: Love it or Hate it

[ianlippert]

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in short, yes. by managing the business cycle, the amplitude of that cycle can be reduced. "overproduction" though is a bit tricky. i'd rather say "production in excess of some limit where the next units produced will be inflationary to a point of pain as a result of instability brough on by large price increases."

but simply put, yes, manageing the businss cycle is a belief of mine as you could guess from my posts.

Barron


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ok so this is one of things I dont really understand. Why doesnt the market reach equilibrium again? Even if the government can smooth out these short term shocks, you seem to be claiming that the market left to its own means will enter into inescapable depression.