Between 1995 and 2000, the U.S. economy experienced surprisingly rapid growth, termed the "new economy" by some observes

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Between 1995 and 2000, the U.S. economy experienced surprisinglyrapid growth, termed the "new economy" by some observes. Was this achange in potential output or short-run output? Alan Greenspan, Fedchairmen, argued it was a change in potential and did not raiseinterest rates to slow the economy. At the time, many economistthought this was a mistake. Look back at the data on inflation inFigure 12.9 to form your own opinion. Write a brief memo (one pageor less) either defending or criticizing Greenspan's position. Besure to use the graphs of the short-run model to make youcase.