If it's -only- a supply shock, then prices would eventually come down, right? Well, we are finding that to be less and less true. So something else is going on beneath the surface.
Not necessarily.
> Well, we are finding that to be less and less true. So something else is going on beneath the surface.
That's fine. We have ways to do monetary policy while accepting whatever else is going on.
If you target NGDP Levels your demand function already balances supply and demand correctly by itself.
>That's fine. We have ways to do monetary policy while accepting whatever else is going on.
That assuming you think the Fed won't make a major policy mistake or hasn't already. You act like monetary policy is simple, it's not. I think MMTers have ruined a lot of people's perception on the complexity of monetary policy.