It's now a familiar story: The Fed raises interest rates to slow the economy. But new research suggests that we are needlessly sacrificing prosperity on the altar of false economic assumptions.
Robert EisnerDec 19, 2001
We mustn't have it too good. Too much growth too little unemployment is a bad thing. These are not the idle thoughts of economic nail-biters; they are the economic policy of the United States. After real growth of gross domestic product (GDP) hit 4.5 percent in the last quarter of 1994 and unemployment dipped to 5.4 percent in December, the Federal Reserve moved on February 1 to raise interest rates for the seventh time in less than a year. Why? To slow our too rapid rate of growth and stop or reverse the fall in unemployment. Why do that? To fight inflation.
