I don’t like the Laplace’s demon. We can do get things better by our own will.
I think we’re in a critical turning point.
We desperately need “neutral”, true rule-based monetary policy.
Yes, NGDP futures.
Krugman suggests that we are maybe getting in “version II economy”.
My interpretation of that is “increasing percentages of monopolistic competitors makes more welfare-loss in the economy, so that’s problem”.
That’s inevitable. If you get richer, you buy more what you want from more monopolistic competitors. (Bare necessities of life are usually supplied by somewhat perfect competitors)
I enjoy many Manga, Anime, Doujinshi, Games. I often go to favorite singer’s concert. Those are supplied by very monopolistic competitors. (And I live in a relatively high-income family and country)
This is historical LDP’s seats share of National Diet.
This is historical RGDP growth of Japan.
I think some voters favored the political preference except economic growth as get it richer. Combined with that, “learning” or “generation’s memory“ model is useful to capture what happened and happening, I think.
I fear we are getting in the world it is difficult to change monetary regime better.(In other words, ““version II democracy”) And I fear the possibility that we will repeat much bigger mountains and valleys (of economic conditions,asset prices,NGDP, whatever..) with stubborn generation’s memory with no learning.
To solve those problems, we desperately need the policy. Yes, NGDP futures.
(I’m tired writing English…will continue…)