Save time by listening to our audio articles as you multitaskA wonkish theory, laid out in glorious detail in a new book by John Cochrane of Stanford University’s Hoover Institution, would offer a potential explanation. “The Fiscal Theory of the Price Level” builds a theory of inflation as ambitious as that proposed by John Maynard Keynes’s “The General Theory” or Milton Friedman’s and Anna Schwartz’s “A Monetary History”.
Mr Cochrane is careful to note that the adjustment of the price level is not instantaneous. People can be poor judges of a government’s credibility when it comes to paying off debts. Just like stocks, prices are able to deviate from fundamentals. Yet in the long run, they adjust. A government that hands out money without eventually running surpluses will not avoid inflation for ever.
Mr Cochrane also brings fiscal theory to bear on America’s inflation in the 1970s-80s. In the mid-1970s price rises exceeded 12%. The Federal Reserve lifted interest rates; inflation dropped to 5% by 1977. Yet Mr Cochrane points out that inflation shot up again to more than 14% by 1980, in part because America failed to get its fiscal house in order.
Economists don't understand most things as well as they would have you believe so I would not be surprised.
Probably, economists are a bloody useless lot
Bu evet mi demek oluyor dost muyuz demek oluyor birlikte harika devrimler demek mi oluyor izliyorum ülkem için bi şeyler yapın
Liz Truss should have read this book. 😀
I agree that this has been underaccounted for. If gov'ts keep spending money (that they do not have), that will push up prices and wages as the gov't competes with the private sector. That is pretty much the definition of inflation.
To embrace the infatuation is the best thing because you show your scary they love it .just carry on
This round of inflation was Kicked off by Biden canceling Keystone Pipeline. The administration’s energy policies caused this. Transportation costs are energy dependent. All vehicles run on oil including Tesla cars. Tires are made of oil .
Stop paying people to stay at home and be non-productive.
Hindsight is so much better than prediction.