The Federal Reserve is clearly in this difficult situation where it needs to express its message more forcefully, because it’s not about how much quantitative easing it does, but the message behind it, says Kenneth Rogoff, an economics professor at Harvard.
So, he certainly welcomes their change towards focusing on final outputs like employment and inflation, though he would have liked to see a little bit looser inflation target because the Fed needs to have inflation targets up to drive investments, he noted.
But the latest development (of explicitly tying unemployment rate to inflation rate) is certainly a welcome change and the evolution process is likely to continue, he added.
Asked if the economy needs any stimulus, either from the Fed or the Congress, Ken said the economy can’t survive on stimulus forever. But withdrawing it too rapidly in a fragile economy makes no sense, and the right plan would be to gradually tighten the monetary policy over a long period, he noted. But the real problem is that the system is so paralyzed that it isn’t being able to be creative.
AdvisorShares, the Bethesda, Maryland-based funds provider of non-index tracking products, has announced the launch of the AdvisorShares Pring Turner Business Cycle ETF (DBIZ), an actively managed fund that seeks long-term growth and capital appreciation across different economic and market cycles through the application of business cycle, technical and fundamental analysis.
