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In Fed and Out, Many Now Think Inflation Helps

nytimes.com

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Re: In Fed and Out, Many Now Think Inflation Helps

#231

Post by ef4 »

eli_gottlieb wrote: post #187
ef4 wrote: post #127

Earlier quoted context omitted.

> data to validate it. You've accidentally illustrated the disconnect. Because the fundamental disagreement between the Austrians and the more mainstream academic schools of thought is epistemological. Data can only settle differences when both sides agree on the epistemological ground rules. I have an advanced science degree. I'm not afraid of math, and I've plowed through Keynes "General Theory". It doesn't come cl…

The whole problem with Austrian economics is that they reject scientific epistemology entirely by waving a big flag on which is written, "Human Free Will makes everything unpredictable!" And then they go ahead and make predictions anyway , out of sheer ideology . If Keynes is epistemologically worthless, fine, but so are von Mises and Hayek. More so, in fact, because they adamantly refuse to employ an empirical metho…

> "Human Free Will makes everything unpredictable!"

Well in practice it currently does. That's not to say that in principle we won't eventually develop a real quantitative science of human behavior -- but it's going to require some major advances in neurobiology.

> And then they go ahead and make predictions anyway, out of sheer ideology.

Yes, but the Austrian response is that all other economists are doing the same, while deceiving themselves that they have no ideology at all. So most economists' axioms and deductions remain unexamined and unchallenged.

Re: In Fed and Out, Many Now Think Inflation Helps

#232

Post by yxhuvud »

clarky07 wrote: post #148
acslater00 wrote: post #116

I'm happy to see this article written, and it will hopefully start to change the attitude of evaluating central bank actions through the lens of 'high inflation bad, low inflation good'. This whole debate is an unfortunate example of what's called "Partial Equilibrium Reasoning" (as opposed to "General Equilibrium Reasoning"). All things being equal, higher inflation is bad. That's clear. But all things aren't equal,…

>This dynamic is why the Fed needs to break the attitude that its job is to keep inflation as low as possible. I'm not sure where you've been the last 5 years, but the current Fed has not in any way had a policy of trying to keep inflation low. Not in the slightest. Bernanke is extraordinarily paranoid about deflation and as such has had 0 interest rates since the crisis started. In addition to that, they are printin…

That assumes that the fed beleives that a big balance sheet of the Fed leads to inflation.

However, they (so far) rightfully do not believe that, and there are next to no inflation to see.

http://libertystreeteconomics.newyorkfed.org/2011/06/will-qu...

Re: In Fed and Out, Many Now Think Inflation Helps

#233

Post by nerfhammer »

nullc wrote: post #179
nerfhammer wrote: post #120

Earlier quoted context omitted.

Just don't go too far and look at gold prices from 35 years ago. http://static.seekingalpha.com/uploads/2010/3/19/saupload_go...

I don't really know much about gold, but that chart is a little questionable: from 1934 to ~1975 private ownership or trade of gold was restricted by law in the US.

how does that make the 1980's gold bubble "questionable"?

Re: In Fed and Out, Many Now Think Inflation Helps

#234

Post by nazgulnarsil »

gaius wrote: post #163
nazgulnarsil wrote: post #152

Earlier quoted context omitted.

So the seller of the home deserves to sell for a lower a price because you want to ban certain types of private contracts between the seller, the bank, and joe?

The seller of the house can choose between X dollars, or more dollars that are worth less in purchasing power anyway. The price changes but the value is the same. You can't spend dollars for which there are no goods, nor can you sell goods for which there are no corresponding dollars, so price and value always converge.

No, the value that Joe wishes to exchange for the home is higher.

Re: In Fed and Out, Many Now Think Inflation Helps

#236

Post by dredmorbius »

eli_gottlieb wrote: post #167
enoch_r wrote: post #53

Absolutely no discussion of inflation is complete without recognition of the fact that inflation and inflation expectations are at historically low levels [1] right now. Economists aren't arguing that we should inflate our way out of debt--they are arguing that we should return to the historical norm. Of course, it's possible that these economists are secretly just pushing inflation as the "hidden tax" we're all up i…

>Finally, most of these arguments are disputed by the so-called "Austrian school" of economics. It's important to recognize that this school is much, much, much more popular with laymen than with professional economists. This doesn't mean that the school's arguments are wrong, but it does raise questions about why the school's arguments which seem so utterly convincing to so many people, don't manage to gain many con…

"we" hold "our" assets mostly in cash and land.

I suspect more HN readers likely hold their assets in future income and earning potential. Which is fairly immune to inflation (as it rises with prices).

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