tag:blogger.com,1999:blog-2098432983500045934.post3382402826826690389..comments2024-03-12T22:19:32.339-04:00Comments on The New Arthurian Economics: So much for the study of cost-push inflationThe Arthurianhttp://www.blogger.com/profile/16501331051089400601noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2098432983500045934.post-6316479061573284282017-11-10T02:22:09.369-05:002017-11-10T02:22:09.369-05:00"Today, I can't even find a link to the S...<br />"Today, I can't even find a link to the Samuelson and Solow paper."<br /><br />Even <a href="https://www.amazon.com/s?ie=UTF8&field-keywords=Problem%20Achieving%20Maintaining%20Stable%20Price%20Level&index=books" rel="nofollow">Amazon</a> doesn't have it!<br /><br />But you could try this link:<br /><br />http://www.jstor.org/stable/1815021?seq=1#page_scan_tab_contents<br /><br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-70446098203646634202017-10-02T02:29:17.869-04:002017-10-02T02:29:17.869-04:00Scott Sumner (not in response to me):
At times it...<br /><a href="http://econlog.econlib.org/archives/2017/10/milton_friedman_22.html" rel="nofollow">Scott Sumner</a> (not in response to me):<br /><br /><b>At times it seems we've gone back to the 1970s, as completely discredited theories of cost-push inflation are being revived ...</b><br /><br />Then Sumner quotes one source, and responds. To my mind, both the quote and the response are irrelevant.<br /><br />Then Sumner quotes somebody who "gets it":<br /><br /><b>This is one of those myths that never dies: cost-push inflation.</b><br /><br />It's the "completely discredited" argument, all over again. But it's not an argument at all, really. It's just an announcement: Cost-push is a "myth"; end of story.<br /><br />From that same source:<br /><br /><b>Wage and price increases are a reflection of inflation, not a cause of it.</b><br /><br />and Sumner himself:<br /><br /><b>It's kind of scary when top Fed officials have forgotten that inflation is a monetary phenomenon.</b><br /><br />Okay, stop right there. Without even getting into causality, I am willing to agree that if prices are going up, then spending must be going up and probably the Q of M is going up as well.<br /><br />Add causality to that, and you get the Sumner quote and the other. HOWEVER, cost-push has one feature that demand-pull does not, which Sumner and the other are ignoring:<br /><br />When cost is the driving force, the failure to increase the Q of M will lead to a failure of growth. <br /><br />With demand-pull, prices go up because they CAN. With cost-push, prices go up because they MUST.<br /><br />With demand-pull, prices go up because there's more money. With cost-push, prices go up because there's more money because otherwise the economy will decline. These are two different circumstances. If you focus only on the Q of M you will never see it.<br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.com