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A theory is appropriate as long as it fits into the fact; when a theory doesn't fit in the fact, it's wise to walk with the fact.

Monday, February 28, 2011

Inflation debate: Empiricists vs. Theorists

Well, here is the latest piece in the New York Times from Christina D. Romer, former chairwoman of President Obama’s Council of Economic Advisers on how far the Fed can go with its quantitative easing measures while checking price stability at the same time. 

The article is a must read one because it describes some common links among economic variables using different schools of thoughts (mainly empiricists and theorists), with a few evidences from the Great Depression.  

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