Continuing with my thoughts on the Delong wrap-up post: William Polley does not shrink from defining "hard landing" -- more specifically "soft landing" -- in his contribution:
A soft landing is stable inflation and unemployment at sustainable levels in the maturing phase of an expansion. You'll know it when you feel it (or don't feel it, as the case may be)...
For my money this is a pretty strong definition of soft landing, and it seems to me that William implicitly does as well:
I remember when the term soft landing started to be used to describe what the Fed did in 1994-95. I liked the term because it seemed to describe in familiar aviation style terms what was happening. The changes in interest rates in 1994-95 were like the corrections that a pilot makes when coming in to land
Fair enough, but I don't think that the 94-95 episode is a great description of a bump-free landing. Real GDP growth slowed substantially, from 4.4 percent in 1994, to 2.4 percent in 1995. For the first half of 1995, annualized GDP growth was less than 1 percent. The unemployment rate actually increased throughout the year before ending 1995 at the same level it stood at the end of 1994.
Things worked out pretty well in the end, of course, but if that period is a good example of a soft landing -- which seems reasonable to me -- the scenario comes with a pretty good soft patch.