by Summary:
In my view, the first step in "thinking about inflation" is not thinking about it at all, but rather jettisoning the concept entirely since it is not reducible to simple inputs, as commonly supposed, but rather involves a constellation of factors whose importance varies with conditions affecting both supply and demand on one hand, and institutional factors as well. There is too much investment in what amounts to nonsense like "monetary policy" to redefine the terms so as to fit a realistic model — if that could even be done in a social science whose subject matter is a complex adaptive system.* Anyway, I’m glad to see that the White House isn’t just thinking harder about inflation but actually doing things to help ease supply-chain bottlenecks. It’s definitely time to start thinking
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In my view, the first step in "thinking about inflation" is not thinking about it at all, but rather jettisoning the concept entirely since it is not reducible to simple inputs, as commonly supposed, but rather involves a constellation of factors whose importance varies with conditions affecting both supply and demand on one hand, and institutional factors as well. There is too much investment in what amounts to nonsense like "monetary policy" to redefine the terms so as to fit a realistic model — if that could even be done in a social science whose subject matter is a complex adaptive system.* In my view, the first step in "thinking about inflation" is not thinking about it at all, but rather jettisoning the concept entirely since it is not reducible to simple inputs, as commonly supposed, but rather involves a constellation of factors whose importance varies with conditions affecting both supply and demand on one hand, and institutional factors as well. There is too much investment in what amounts to nonsense like "monetary policy" to redefine the terms so as to fit a realistic model — if that could even be done in a social science whose subject matter is a complex adaptive system.* Anyway, I’m glad to see that the White House isn’t just thinking harder about inflation but actually doing things to help ease supply-chain bottlenecks. It’s definitely time to start thinking
Topics:
Mike Norman considers the following as important:
This could be interesting, too:
Robert Vienneau writes Austrian Capital Theory And Triple-Switching In The Corn-Tractor Model
Mike Norman writes The Accursed Tariffs — NeilW
Mike Norman writes IRS has agreed to share migrants’ tax information with ICE
Mike Norman writes Trump’s “Liberation Day”: Another PR Gag, or Global Reorientation Turning Point? — Simplicius
Anyway, I’m glad to see that the White House isn’t just thinking harder about inflation but actually doing things to help ease supply-chain bottlenecks. It’s definitely time to start thinking outside the inflation (black) box.1
The Lens
We Need to Think Harder About Inflation
We Need to Think Harder About Inflation
Stephanie Kelton | Professor of Public Policy and Economics at Stony Brook University, formerly Democrats' chief economist on the staff of the U.S. Senate Budget Committee, and an economic adviser to the 2016 presidential campaign of Senator Bernie Sanders
* This also goes for many other conventional economic concepts that are unhelpful and misleading, as heterodox economists have been pointing out a long time.