420 Results for “inflation”
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Article
Rapid Money Supply Growth Does Not Cause Inflation
Dec 2, 2016
Neither do rapid growth in government debt, declining interest rates, or rapid increases in a central bank’s balance sheet
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Article
Inflation Narratives and Their Consequences
Jul 31, 2023
On the reflexive relationship between inflation and inflation narratives
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Article
Mainstream Economists Have Been Using a Misleading Inflation Model for 60 Years
Feb 8, 2021
Comment on Paul Krugman’s recent observations on US inflation
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Article
Standard Inflation Theory Leaves Out Social Conflict and Costs
Jun 10, 2021
What That Means For Biden’s Inflation Policy Trilemma
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Article
Bernanke and Blanchard’s Obsession with the Wage-Price Spiral
Apr 8, 2024
Bernanke and Blanchard have made another failed attempt to salvage establishment macroeconomics after the massive onslaught of adverse inflationary circumstances with which it could evidently not contend.
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Video
Unmasking Inflation: Why the Conventional Wisdom is Failing Us
Jun 21, 2023
Dive into the complexity of inflation and its impacts from a heterodox perspective, exploring its historical journey, social implications, and potential remedies.
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News
Taylor and Barbosa’s response to Krugman's inflation argument is summarized in Daily Kos
Feb 9, 2021
RSS PUBLISHED TO eState4Column5©2013 Political Economy Group DK PEG Anti-Capitalist Chat TAGS Culture Economy Employment Media MMT PoliticalEconomy publicpolicy stagflation WhiteHouse Share this article Let real wages (of $15+/hour) grow faster than labor productivity for some years, undoing the wage repression of the last decades. We have been misled by neoliberal economics for now many decades, it’s time to turn many things around in what is becoming a second-rated US economy, recently crippled by the malevolent and narcissistic “king of debt”. In economics, stagflation or recession-inflation is a situation in which the inflation rate is high, the economic growth rate slows, and unemployment remains steadily high. It presents a dilemma for economic policy, since actions intended to lower inflation may exacerbate unemployment. The biggest risk for the stock market in 2021 is inflation, according to Morgan Stanley. Unprecedented radical spending by the federal government and the Federal Reserve, to stave off a panic-induced market crash, helped artificially drive stocks to temporary new highs last year. www.laloftblog.com/… For some, the math bore out the possibility that exuberance was rational even if the economy is always more irrational than its math. “The Lucas fantasy of costless disinflation from credible commitments in an ergodic world of rational agents was decisively falsified long ago.” The underlying problems of supply shocks related to Trumpian idiocy atop bailing out the banksters may have made the economy much worse. The pandemic has only made a bad situation worse, or made more of us myopic in our isolation. Paul Krugman has now taken the time to question the orthodoxy of stagflation. Darn economic orthodoxy being wrong since the 1970s. Let me start with the inflation story the way most economists, myself included, have been telling. In the beginning was the Phillips curve: the apparent tradeoff, fairly visible in the data, between unemployment and inflation. In the 1960s many people looked at that tradeoff, considered the mild costs of inflation versus the benefits of lower unemployment, and argued for monetary and fiscal policies aimed at running the economy hot. But in a hugely influential speech Milton Friedman made an argument also independently made by Columbia’s Edmund Phelps: the unemployment-inflation tradeoff wasn’t real, because any sustained effort to keep unemployment low would lead not just to high inflation but to ever-accelerating inflation. They claimed, specifically, that people setting wages and prices would begin marking them up to anticipate future inflation, so that the inflation rate associated with any given unemployment rate would keep rising. They predicted, in particular, that the course of the economy over time would look something like this: https___bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com_public_images_81db75c8-59f2-4b95-a60a-fe404a50c119_914x5331.png First, a government would push unemployment down; but this would lead to ever-rising inflation, which would stay high even as the economy cooled. So it would take a sustained period of high unemployment to get inflation down again, until finally unemployment could be brought back to a sustainable level. So their analysis predicted “clockwise spirals” in unemployment and inflation. Then came the 1970s: https___bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com_public_images_1d91277a-44fe-422b-b0c3-f1dfa8fb7428_933x5501.png This sure looked like a dramatically successful out-of-sample prediction — sort of an economics version of “Light bends!” Almost everyone in the economics profession took the Friedman-Phelps analysis as confirmed. This in turn had big practical and intellectual consequences. First, governments and central banks stopped pursuing low unemployment, believing that excessively ambitious stimulus caused the stagflation of the 1970s. They began aiming for stable unemployment around the NAIRU —non-accelerating-inflation rate of unemployment — instead. Second, since the Friedman/Phelps prediction was based on trying to assess what rational price-setters would do, their apparent success gave a big boost to the notion that all economics should be based on maximizing behavior. Friedman always had too strong a reality sense to personally go down the rational-expectations rabbit hole that swallowed much of macroeconomics, but given the law of diminishing disciples it was bound to happen. Third, the whole affair gave a boost to conservative ideology. We had seemingly seem a demonstration of the limits to government action; also, the Chicago boys had seemingly been proved right about something big. (I remember classmates in grad school saying “They were right about this. Why don’t you think they’re right about the rest?”) Finally, the Volcker disinflation of the 1980s — using high unemployment to end high inflation — became, in many minds, the model of what responsible policymakers should do: make tough choices for the sake of the future. BUT WHAT IF WE’VE BEEN TELLING THE WRONG STORY ALL ALONG? […] But suppose something like this is true. In that case, the narrative that saw stagflation both as the cost of excessively ambitious macroeconomic policy and as a vindication of conservative economic ideas was mostly wrong. And that matters not just for history but for policy right now, which is still to some extent constrained by the fear of a 70s repeat. How do you ask someone to be the last worker to be unemployed for a mistake? paulkrugman.substack.com/… The reality in a response by Lance Taylor and Nelson Henrique Barbosa Filho is that “For practical purposes, the results mean that, for the Fed to meet its inflation target, it would be necessary to let real wages grow faster than labor productivity for some years, undoing the wage repression of the last decades. Biden’s $15 minimum-wage proposal is a correct step in that direction.” This is despite so many economists taking an opposite, more cautious position. — Daily Kos
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Article
In the Footsteps of Ptolemy: The ‘Science of Monetary Policy’ and the Inflation of 2021-2023
Oct 9, 2023
The impenetrability of this continuously expanding Ptolemaic New Keynesian paradigm is maddening
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Article
Markups, Profit Shares, and Cost-Push-Profit-Led Inflation
Jun 6, 2023
To what extent is profit-led inflation compatible with what we know about the price-setting behavior of firms and income distribution?
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Article
Inflation, Import Prices, and the Labor Share
Jan 25, 2021
The Challenge to Bidenomics
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Article
Inflation in a Time of Corona and War
Jun 6, 2022
Evidence-based answers to the main (policy) questions concerning the return of high inflation
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Article
A Big Fiscal Push is Urgent, The Risk of Overheating Is Small
Mar 2, 2021
The $1.9 trillion stimulus should be large because the need is large
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Article
The Great Inflation Debate: Supply Shocks and Wealth Effects in a Multipolar World Economy
Jan 3, 2023
Setting the record straight and identifying less destructive pathways forward than round after round of interest rate increases.
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Webinars and Events
Global Inflation Today: What Is to Be Done?
ConferencePERI Conference, featuring INET Research Director Thomas Ferguson and INET Grantees
Dec 2–Nov 3, 2022
Emerging out of the COVID lockdown, inflation in the U.S. and globally has risen to the highest levels in 40 years. On December 2-3, PERI will host a conference to explore the causes of this global inflation spike. Conference participants will also provide critical perspectives on the austerity macroeconomic policies being implemented globally to control inflation and will propose alternative policies capable of managing inflation without imposing austerity and rising mass unemployment.
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Article
Profit-Led Inflation Redefined: Response to Nikiforos and Grothe
Jun 6, 2023
Besides changes in institutions and social norms, other phenomena could explain a rise in the profit share.