Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Yes, the impact being worked through is a drop in real incomes. To the extent that wages and the labor markets are not sufficiently "flexible" to pass that drop in real income as a drop in nominal incomes, then it must work out as a pulse of high inflation.

Obviously holders of wealth in financial assets prefer the former, which concentrates the loss real income on wage earners, to the latter, which spreads the loss in real income into some of the high income households.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Thu Aug 2nd, 2012 at 11:41:46 AM EST
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