And we would also heed the advice of another well-known investigator. Carl Sagan used to say that “extraordinary claims require extraordinary evidence.”
Similarly, if you’re going to embark on Grand Experiments, you’d better make sure that your assumptions are rock-solid. But as we’ve shown, there should have been serious doubts about some key assumptions underlying central bank policy.
Ultimately, only policies that genuinely address the challenges of demographics and productivity have a chance to succeed. Meanwhile, the notion that the Fed can indefinitely forestall the 48th recession in U.S. history remains wishful thinking.
Lakshman Achuthan is chief operations officer for the Economic Cycle Research Institute.