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That Can’t Happen Again?

Posted by Sean | Posted under Economics | September 4, 2008

I’m almost done with Deflation: What Happens When Prices Fall by Chris Farrell.

money quote:

Now, when the Fed governors fanned out across the country to reassure the public, they repeatedly mentioned that the central bank had a number of tools in its monetary toolbox. But most of these methods are untested.

Now, I’m not outside proclaiming the end of times. Mainly due to the rain delay. :-)

But seriously.

I question our tendency to ignore outliers when talking about economic issues.

“Oh, XYZ? We are smarter now. That can’t happen again.”

I think people mean to say, “That can’t happen again in exactly the same way.”

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1 Comment so far
  1. Dawn September 5, 2008 11:36 am

    pssssst. Just an FYI I nominated you for the Pay it Forward award. Its just a fun little thing between pf blogs.