Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Yes, but I still haven't claimed that you automatically return to the trend! I said that even if you believe in that idea, there will be lost output if you don't act contracyclically. And returning to a full employment equilibrium in the long run by doing nothing (through wage deflation and without stimulus), does not necessarilly mean you catch up to the trend. You might fall behind the trend permanently, but still reach an equilibrium, just one where GDP is lower, lagging timewise, compared to if you had intervened in the short term.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Nov 3rd, 2011 at 05:19:50 PM EST
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