Goldman Sachs Chief Economist Proposes A Simple Fix To The Fed's Biggest Problem

The biggest unknown in the world of monetary policy today is the amount of slack in the U.S. labor market. Unemployment has been plummeting over the past few years as workers have exited the labor force, but inflation remains persistently low nonetheless, giving rise to the notion that there is more slack in the labor market than the drop in the unemployment rate suggests. The answer to the question of which indicator — unemployment or inflation — is correct about the health of the labor mar...