by Summary:
The Secret Connection: Income, Prices
Topics:
Steve Keen considers the following as important:
This could be interesting, too:
The Secret Connection: Income, Prices
Topics:
Steve Keen considers the following as important:
This could be interesting, too:
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| The Secret Connection: Income, Prices |
What do you think about this? Responding to the best comments.
Well, if other products didn't rise the same multiple as bananas and coconuts our preference for those other products increase relative to donuts and bananas.
Is the preference controlled by prices or by what people actually want?
@@NelsonGuedes
Both are based on preferences
just because you double the income doesn't mean someone will be willing to spend twice as much on the same goods. u can have more money and still feel ripped off by higher prices. or u can have half as much income and still be willing to pay a higher price depending on what u need and ur options. it's ridiculous to simplify people like this utility curve
There are the subjective preferences of individuals but there are also objective limits that are beyond subjective preferences. Demand for necessary goods and services is inelastic because of those objective limits. You will try to buy enough food to survive regardless of your income and the price of the food. Same for housing and healthcare.
Yeah, even with slightly higher nominal wages, real wages have been falling because the price of everything has been increasing higher than everything else. And then the fan of Austrian economics comes along and blames the Federal Reserve 😂
I think money necessarily complicates and obscures the truth. If we had an economy where we measured the supply and demand of everything in units we wouldn't have this whole "nominal vs real" confusion.