esp.eclipser
New member
Firstly, everyone is talking about high inflation in the US. Why? The CPI for May was 0.1% which is lower than optimal. Before that there was deflation. The PPI tells a similar story. Is it because the media is making something of it? (I really hope not because inflation is one of those self-fulfilling things - if people expect it, it will happen.)
Secondly, why all this dumping on people who support government intervention (and labelling them all Keynesians)? Has this also been talked about in the media?
If you want to cite economic theory as your answer, I'd be happy to hear it, but please don't unless you are fairly confident you know what you are talking about.
Inflation is the change in price, not the money supply over growth. There is a difference.
I'm sorry but expected inflation is not just an American thing. Its effect is due to the nature of inflation, not due to the nature of America.
How many episodes of money printing have there been recently in the US? To my knowledge only one, perhaps I am wrong?
If you are familiar with economics you will know that all past hyperinflations have involved continual money printing. It is because inflation is a rate, not a quantity. A one off increase can not bring a sustained higher rate.
And what about all the deflationary pressure? Don't you think that a temporary decline in money growth caused by negative GDP growth could be offset by a one off increase in money growth? The policy economists certainly did. I guess you have a reason for thinking their logic is flawed?
Thanks Kingfischer. So I guess your answer to my first question is yes?
If the economy starts to bustle again, what will put upward pressure on the interest rates? Increased demand for money? But why would this be moreso than the usual situation of controlling interest rates in the face of rising GDP? Why would the upward pressure of interest rates not be accompanied by the GDP growth that would make raising them not so harmful?
Sorry, I guess you're saying that it is the debt level that will increase the pressure. Sounds logical.
I guess that is the decision that was made by the Fed and the government. The economy was not in a good shape to start with, and they had to make a decision between letting the economy go down the toilet or facing the risk of slow growth to come.
Secondly, why all this dumping on people who support government intervention (and labelling them all Keynesians)? Has this also been talked about in the media?
If you want to cite economic theory as your answer, I'd be happy to hear it, but please don't unless you are fairly confident you know what you are talking about.
Inflation is the change in price, not the money supply over growth. There is a difference.
I'm sorry but expected inflation is not just an American thing. Its effect is due to the nature of inflation, not due to the nature of America.
How many episodes of money printing have there been recently in the US? To my knowledge only one, perhaps I am wrong?
If you are familiar with economics you will know that all past hyperinflations have involved continual money printing. It is because inflation is a rate, not a quantity. A one off increase can not bring a sustained higher rate.
And what about all the deflationary pressure? Don't you think that a temporary decline in money growth caused by negative GDP growth could be offset by a one off increase in money growth? The policy economists certainly did. I guess you have a reason for thinking their logic is flawed?
Thanks Kingfischer. So I guess your answer to my first question is yes?
If the economy starts to bustle again, what will put upward pressure on the interest rates? Increased demand for money? But why would this be moreso than the usual situation of controlling interest rates in the face of rising GDP? Why would the upward pressure of interest rates not be accompanied by the GDP growth that would make raising them not so harmful?
Sorry, I guess you're saying that it is the debt level that will increase the pressure. Sounds logical.
I guess that is the decision that was made by the Fed and the government. The economy was not in a good shape to start with, and they had to make a decision between letting the economy go down the toilet or facing the risk of slow growth to come.