>So, where did all this money come from? The Fed printed it.
The amount of people that should know people who keep shoving this simple fact under the rug is astonishing to me.
> In real terms, the country is still consuming far more goods than the pre-pandemic trend.... In real terms, the import of goods grew by 20% during the pandemic.
>So, where did all this money come from? The Fed printed it.
The amount of people that should know people who keep shoving this simple fact under the rug is astonishing to me.
> In real terms, the country is still consuming far more goods than the pre-pandemic trend.... In real terms, the import of goods grew by 20% during the pandemic.
Hey look, you've got actual data behind your claims rather than hand waving the problem in a statement. How many talking heads talking about supply chain issues actually looked at the numbers I wonder.
Academics love talking about "inflation expectations" because it implies that they can control inflation without a cost. If only there was a way to convince the public "its all in their head", they can continue business as normal. If you're a discipline of Milton Friedman and accept "inflation is everywhere and anywhere a monetary phenomenon", you also accept there is a real cost to defeat inflation, that you must stop the "inflationary tax".
Whenever I think on inflation, I always start with this article (actually an excerpt from his autobiography) by Paul Volcker, "What's wrong with the 2% inflation target".
>A 2 per cent target, or limit, was not in my textbooks years ago. I know of no theoretical justification. It's difficult to be both a target and a limit at the same time. And a 2 per cent inflation rate, successfully maintained, would mean the price level doubles in little more than a generation.
>I do know some practical facts. No price index can capture, down to a tenth or a quarter of a per cent, the real change in consumer prices. The variety of goods and services, the shifts in demand, the subtle changes in pricing and quality are too complex to calculate precisely from month to month or year to year.
>Moreover, as an economy grows or slows, there is a tendency for prices to change, a little more up in periods of economic expansion, maybe a little down as the economy slows or recedes, but not sideways year after year.
"Academics love talking about "inflation expectations" because it implies that they can control inflation without a cost. If only there was a way to convince the public "its all in their head", they can continue business as normal. "
Precisely. This is a more eloquent way to put the feeling I was trying to explain on the Twitter Spaces which prompted this whole post. Focus on "expectations" takes focus away from the tangible policy measures that both create and destroy inflation.
>So, where did all this money come from? The Fed printed it.
The amount of people that should know people who keep shoving this simple fact under the rug is astonishing to me.
> In real terms, the country is still consuming far more goods than the pre-pandemic trend.... In real terms, the import of goods grew by 20% during the pandemic.
Hey look, you've got actual data behind your claims rather than hand waving the problem in a statement. How many talking heads talking about supply chain issues actually looked at the numbers I wonder.
Academics love talking about "inflation expectations" because it implies that they can control inflation without a cost. If only there was a way to convince the public "its all in their head", they can continue business as normal. If you're a discipline of Milton Friedman and accept "inflation is everywhere and anywhere a monetary phenomenon", you also accept there is a real cost to defeat inflation, that you must stop the "inflationary tax".
Whenever I think on inflation, I always start with this article (actually an excerpt from his autobiography) by Paul Volcker, "What's wrong with the 2% inflation target".
https://www.afr.com/policy/whats-wrong-with-the-2pc-inflation-target-paul-volcker-20181025-h172ij
>A 2 per cent target, or limit, was not in my textbooks years ago. I know of no theoretical justification. It's difficult to be both a target and a limit at the same time. And a 2 per cent inflation rate, successfully maintained, would mean the price level doubles in little more than a generation.
>I do know some practical facts. No price index can capture, down to a tenth or a quarter of a per cent, the real change in consumer prices. The variety of goods and services, the shifts in demand, the subtle changes in pricing and quality are too complex to calculate precisely from month to month or year to year.
>Moreover, as an economy grows or slows, there is a tendency for prices to change, a little more up in periods of economic expansion, maybe a little down as the economy slows or recedes, but not sideways year after year.
Damning critiques from the man himself.
"Academics love talking about "inflation expectations" because it implies that they can control inflation without a cost. If only there was a way to convince the public "its all in their head", they can continue business as normal. "
Precisely. This is a more eloquent way to put the feeling I was trying to explain on the Twitter Spaces which prompted this whole post. Focus on "expectations" takes focus away from the tangible policy measures that both create and destroy inflation.