Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
I don't think I've changed my position, in that I think that the fight against inflation is a good policy in general.

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

by Jerome a Paris (etg@eurotrib.com) on Wed Dec 12th, 2007 at 12:36:01 PM EST
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If costs remain the same, and a company finds it is able to increase prices because of increased demand, or decreased competition, then isn't that de facto "inflation"?

In other words isn't profit - virtually by definition -  the principal direct "cause" of inflation?

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Wed Dec 12th, 2007 at 03:41:51 PM EST
[ Parent ]


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