Tinbergen's rule explains everything: central banks have 1 instrument (interest rates) but politicians ask them to fix 5 things - inflation, growth, climate, inequality, and now AI. You can't maximize two things at once, let alone five. That's why they look clueless. We ask the Fed to be God with a hammer.
Tinbergen's rule explains everything: central banks have 1 instrument (interest rates) but politicians ask them to fix 5 things - inflation, growth, climate, inequality, and now AI.
You can't maximize two things at once, let alone five. That's why they look clueless.
We ask the Fed to be God with a hammer.