But what he fails to say is that (i) low inflation was the overriding goal of policy (because inflation eats into financial returns) and (ii) inflation became increasingly defined as increasing labor wages, the idea that higher wages caused higher cosnumer prices having been "proven" in the 70s.
Is this a shift in your view here, on bias of monetary policy, inflation, wages and income distribution?
We've had a number of arguments on this subject, and it seems to me your disposition here is a bit of a shift. Fai de bèn a Bertrand, te lou rendra en cagant
What I'm critiquing is the slow drift of the notion of inflation to focus almost exclusively on wage inflation, to the extent that all wage increases are bad (and not just, as theory would have it, increases that are higher than productivity increases and push the share of value going to labor higher), and the simultaneous abandonment of any worry about asset inflation. This has been less true of the ECB, which I expect will emerge out of this mess with its reputation enhanced, both for a pragmatic policy in the past few years, and for its no-nonsense response to the current crisis. In the long run, we're all dead. John Maynard Keynes
In other words isn't profit - virtually by definition - the principal direct "cause" of inflation? "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
For inflation as it affects the vast majority of us, I return to John Williams' site, www.shadowgovernmentstatistics.com . The idea that the rate of inflation for most U.S. citizens is 2 to 3 times as high as the official CPI fits in with Jerome's theme, too, in that the super-rich have transferred more debits (increased prices) to the 'middle class', which in true accounting fashion reappear as credits on the corporations' profit lines. paul spencer
