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Inductive risk in macroeconomics: Natural Rate Theory, monetary policy, and the Great Canadian Slump

Published online by Cambridge University Press:  16 December 2020

Gabriele Contessa Open the ORCID record for Gabriele Contessa [Opens in a new window]
Gabriele Contessa*
Affiliation:
Department of Philosophy, Carleton University, Ottawa, Canada
*
Email: gabriele_contessa@carleton.ca
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Abstract

This paper has two main goals. The first is to fill a gap in the literature on inductive risk by exploring the relevance of the notion of inductive risk to macroeconomics. The second is to draw some general lessons about inductive risk from the case discussed here. The most important of these lessons is that the notion of inductive risk is no less relevant to the relationship between the proximate and distal goals of policy than it is to the relationship between specific policies and their proximate goals.

Keywords

inductive riskmacroeconomicsmonetary policyNatural Rate Theory

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Article
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Economics & Philosophy , Volume 37 , Issue 3 , November 2021 , pp. 353 - 375
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© The Author(s), 2020. Published by Cambridge University Press

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