Four Ways to Think About the Economy … I see four different schools of thought about how the economies of the U.S. and much of the developed world should be managed. The challenge for the Federal Reserve and other central bankers is that it's hard to know who's right. –Bloomberg

The author of this article proposes a series of unique, economic "schools."

The first, he says, are "neutralists." This group of economists believe that so long as inflation is "low and stable," central banks need not exercise their power.

They believe that government officials should spend more time concentrating on building better economies and less time worrying about monetary policy.

The second group, he calls, "inflationistas." These economists worry a lot about price inflation and are constantly upset by lack of definitive Fed action to combat it.

Inflationistas see price inflation everywhere and want to use central banks to take constant action to make sure it doesn't get worse.

The third group is the "bubblers." He compares this group of economists to the "neutralists." The neutralists don't want much central bank activity. The bubblers are actually "skeptical about the efficacy of monetary policy."

The bubblers don't even see central banks at the heart of monetary phenomena. "Many would even say that inflation is being driven largely by technological and demographic forces outside central banks' control."

The fourth group is called "the gappers." Gapper economists believe that economic activity is modest and will have to climb much higher to create price inflation.

Gappers want central bank activism via increased monetary production. They are in favor of continued low interest, additional quantitative easing and other creative kinds of stimulus to support and expand economic activity.

These Gappers are so convinced that more can and should be done that they argue that if central banks are reluctant to be proactive, fiscal and government authorities should take over and do the job themselves.

This argument is a somewhat incendiary one that "provokes the inflationistas and also many neutralists, who believe that government is already too big."

Having summarized these four schools of thought, the article asks, "who's right?"

Somewhat predictably, the author decides that all four points of view have at least some validity.

The neutralists are correct that we should consider ways to improve the economy's longer-term growth potential …

The Fed shouldn't address the inflationistas' concerns by choking off growth now. Instead, the central bank should be clear about its willingness to raise rates sharply once "core" inflation … has risen in a sustainable way above the 2 percent target.

If the bubblers are right about artificially inflated asset prices, that doesn't necessarily mean that an ensuing bust has to severely harm the economy.

Gappers are demonstrably right that inflation and expected inflation are too low in the developed world. On this front, there's plenty that monetary and fiscal authorities can do.