Basic Effective Demand Limit, L = labor share index * 0.762Broader
Effective Demand Limit, L = 0.76*LSI+ 29*G/rGDP - 40*yearly change in
rGDP - 96*CPIall + 58*(ED-FF) - 54*(10year-FF, yoychange) Effective
demand on real GDP = rGDP*e*T/L (1 -(1 - 1/e)T/L) Effective Demand
Monetary rule with NGDP targeting = z(T2 + L2) - (1 - z)*(T + L) +
(1+a)*current core inflation + a*core inflation average - 2a*core
inflation target z = (2L + Natural real rate)/(2L2 + 2L)
............................ T = capacity utilization*(1 -
unemployment rate)UT index = L - T ... (UT index goes to zero at limit
of business cycle.) New economic thinking... effective demand limit
upon the utilization of labor and capital
