The strong domestic demand boosted by a virtuous cycle of production, income, and spending, inflow of overseas capital, and recovery in exports to industrialized countries also contributed to the high growth.
I would argue that the result of our short-run focus in 2003 was to contribute to 10 percent unemployment five years later. That said, I am not advocating for tight monetary policy. I’m advocating that the FOMC carefully move to a non-zero rate.