Although the article "Trump's Ideas About the Deficit Sound Inflationary" (by Finance Professor Noah Smith) was supposed to tell readers how crazy Donald Trump's theories about debt were, it actually highlighted that mainstream views about inflation are actually the ones that are fairly ludicrous. I would note that I cover most of the underlying debate behind this article in Understanding Government Finance.Bond Economics
(Not) Understanding Government Finance...
Brian Romanchuk
1 comment:
"Government taxes are withheld at source, and are therefore effectively indexed in real time, while almost all spending is not indexed in real time. A jump in the price level would cause a rapid movement towards a fiscal surplus, which would kill the excess demand that was allegedly fuelling the hyperinflation."
You have to look at the process in time domain like this as much as possible... leads to more effective refutations...
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