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By: dtoh

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Peden,

1. There’s not going to be much evidence (at least statistically significant evidence) regarding this issue so I think the lack of evidence is not a valid argument.

2. Hysteresis can be pretty long lasting so that argues for a higher NDGP target.

3. Fundamentally I think you can posit that regardless of hysteresis, financial asset prices are less sticky than wages and therefore a high target will lead to more rapid adjustment.


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