Austan Goolsbee: commitment

Transcript context

…I’m a little confused at the theoretical level. On one hand, you’re saying M times V is an identity, but on the other hand, it drives inflation dynamics. It’s why I started back from the — I bring a micro sentiment to the thinking about causality and supply and demand. I sense that you want to bring us to agreeing on a monetary policy rule, and I’m inherently a little uncomfortable. I want to see what the rules say, but I fundamentally don’t want us to pre-commit to any given rule in a way that’s not robust to shocks. Now, you mentioned the post-pandemic inflation and the role of the supply side. When I look at that inflation, I see prices really haven’t come back down. They’ve stayed up, and I see service prices are also quite high and went up a lot, so I tend to think it was mostly demand side. Now, why is that wrong?…

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