71–80 of 83 posts
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Yeah maybe we need to leave these sort of high level discussions to experts and the media... Ordinary people don't have any business discussing these issues because they don't have the expertise and the credentials
The best thing about economics credentials in the US is that the process to earn them isn't ideologically gated
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Blaming the current situation on the Ukraine War reminds me of the crash in 2001. Things were going downhill already long before but when 9/11 happened, suddenly everybody blamed the crash on 9/11. I am pretty sure the current situation would have happened without the Ukraine war. Maybe a little different but the writing was on the wall long before.
"Things were going downhill already long before" Inflation in Germany stayed So it's not clear what you have been referring to.
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Thank you. I don't think I was being careful in my phrasing. By capital, I'm referring to the actual machinery and so forth used for production. Also, I expanded on that idea (as I noted) by including transportation, considering transportation to be, broadly speaking, involved with production and contributing to its cost. But, as your question points out, I'm not really talking about destruction so much as I am about…
So by capital destruction you're referring to shutting down large sectors of the economy due to the coronavirus? Or was this already taking place before 2020? I didn't think you were referring to a conspiracy. I just didn't know what you meant, since if you have capital, it's not really rational to destroy it
I was horrified when things got shut down. Even when I originally bought into "two weeks to slow the spread" and believed it was only going to be for two weeks, I was concerned that a global, advanced division-of-labor economy cannot be switched on and off like a lightbulb.
Keep in mind that this forum is very competent when it comes to software discussions, while tending to overstate its economic knowledge. To your question: what it comes down to is that the fed is charged with managing inflation and unemployment. Regardless of the effectiveness of their tools, they are required to do what they are able to do. With that in mind, it’s possible that there is a better course of action. Pe…
My education is in economics and finance. I just happen to have also programmed for a long, long time. The first thing I would say is that economics is as slippery as nearly any other social science. So no one really knows what will and will not work in macroeconomics because even when they try there could be many convoluting factors to make a reasonable assessment of what actually happened. >Personally I find the ar…
With "...all political economic schemes..."?
Then obviously the problem is not with MMT but with something else. Are are suggesting that the rich are the problem? Are you also suggesting that the elimination of the rich is the solution?
In either case please clearly state so. You might also suggest how to eliminate the rich and thereby achieve a better world.
Powell's been clear that the purpose of the rate hikes is to destroy demand until it matches what the economy can currently supply – this is practically a direct quote from his last press conference. Supply and demand are always interchangeable when it comes to prices. We might compare supply (real GDP) to trend, and find it's been low, and conclude there's a supply and not a demand problem.[1] But the Fed is a bank…
You state that supply and demand are interchangeable they are not, a classic example would be the elasticity of a specific demand or market.
Then you say that the fed cannot do anything about the supply which isn’t correct at least if you are talking about the supply of money increasing the interest rates can reduce the supply of money within a given economy.
I have long doubted that policy has much to do with inflation. Having lived through sever inflation, in my personal experience inflation is all about inflationary expectations. It was all about trying to personally gain advantage by getting ahead of everyone else. On the other hand I don't know squat about monetary policy, so I'm probably confused.
Monetary policy says that the most dangerous thing is when inflation expectations become un-moored, which is deeply and fundamentally psychological. If you've lived through that, you probably have a better understanding of the most dangerous part of inflation than any modern US central banker who doesn't have a similar personal experience.
Powell's been clear that the purpose of the rate hikes is to destroy demand until it matches what the economy can currently supply – this is practically a direct quote from his last press conference. Supply and demand are always interchangeable when it comes to prices. We might compare supply (real GDP) to trend, and find it's been low, and conclude there's a supply and not a demand problem.[1] But the Fed is a bank…
I’m a bit confused by this comment. You state that supply and demand are interchangeable they are not, a classic example would be the elasticity of a specific demand or market. Then you say that the fed cannot do anything about the supply which isn’t correct at least if you are talking about the supply of money increasing the interest rates can reduce the supply of money within a given economy.
A price change by can be caused by changes in supply, demand, or both. Additional information is needed to determine which. In the present situation it seems demand is 'normal' but supply is constrained.
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When fuel prices in the 70s skyrocketed, so did inflation (talking about Germany where the Vietnam war/gold standard was not a factor).
When oil prices went from $86/bbl in 2007 to $176/bbl in 2008, inflation went from 2.5% (2007) to 3.7% (2008), which was within "target" for the fed. Oil peaked at $108/bbl during Covid, and that's not inflation adjust. You can't tell me that when oil prices doubled in in 2008 and no inflation happened, that oil prices drove inflation now when it went up far less. Like I said, supply constraints can drive inflation w…
In Europe inflation was driven by oil prices in the 70s because industry production was based on oil energy.
Europe switched to natural gas for industrial production.
Because natural gas costs were driven by long term contracts, not the spot market, it did not increas in 2008.
When because of the invasion natural gas costs spiked, despite long term contracts with Russia because companies needed to get out of them and buy natural gas on the market, inflation spiked.
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I’m a bit confused by this comment. You state that supply and demand are interchangeable they are not, a classic example would be the elasticity of a specific demand or market. Then you say that the fed cannot do anything about the supply which isn’t correct at least if you are talking about the supply of money increasing the interest rates can reduce the supply of money within a given economy.
"Supply" here does not refer to money, but to physical goods and services. A price change by can be caused by changes in supply, demand, or both. Additional information is needed to determine which. In the present situation it seems demand is 'normal' but supply is constrained.