Controversy

NR asked the following questions of several distinguished economists: 1. Has Federal Reserve policy helped or hurt the economy’s growth in the 1990s? Was the recent increase in interest rates a bad idea? 2. Does supply-side policy require an accommodating monetary policy? If so, how does it differ from old-style Keynesian policy?

For months Alan Greenspan and many of his top lieutenants have been publicly grumbling about the inflationary dangers of too much growth, or stock prices that are too exuberant, or unemployment that is too low, or wages that are too high. People are working and prospering, and somehow this must be a bad thing. So, in the Fed’s perversely pessimistic logic, interest-rate increases must be applied to stop the march of progress.