Yesterday’s US inflation data from the Bureau of Labor Statistics (July 12, 2023) – Consumer Price Index Summary – June 2023 – shows a further significant drop in the inflation rate as some of the key supply-side drivers continue to abate. The annual inflation rate is now back to 3 per cent and dropping fast. The risk now is that the conduct of the Federal Reserve will drive the US into a deflationary period with rising unemployment. Given that inflation peaked in the third-quarter 2022, that wages growth has been relatively subdued, and inflationary expectations’ survey evidence suggests no-one really thinks the inflation was going to endure, means that the US Federal Reserve’s logic is deeply flawed and not fit for purpose. They have been chasing an obsession that exists in a parallel universe to the real world. The risk is that they will continue to chase that obsession and use the fact that unemployment has still not risen much to claim there has to be higher unemployment. However, hopefully, the 3 per cent inflation rate result yesterday will cut-off any wild claims that they have to get the inflation down more quickly or risk a wages or expectations explosion. All cant of course.
Unfortunately, it is difficult to establish causality when many causal factors are potentially involved and there are also different kinds of inflation, e.g., cost-push and demand-pull. So, the Phillips curve-NAIRU farce of central banks using assumptions of conventional economics continues and the Fed will take credit.
William Mitchell — Modern Monetary Theory
US inflation rate down to 3 per cent and falling fast – it was transitory, folks
Bill Mitchell, Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
US inflation rate down to 3 per cent and falling fast – it was transitory, folks
Bill Mitchell, Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
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David Colander quote.
The systemic failures of economic methodologists
Lars P. Syll | Professor, Malmo University
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A system produces the result of its design. Under "capitalism" economic systems are designed for "growth" through capital accumulation. Such systems assume, for example, that "labor" is a market and "land" (natural resources) are unlimited and that "the solution to pollution is dilution." In the extreme, the assumption is that "there is no such thing as society" (Margaret Thatcher).
12 comments:
“ hopefully, the 3 per cent inflation rate result yesterday will cut-off any wild claims that they have to get the inflation down more quickly”
You have to watch the political polling …
If people generally still think there is figure of speech “inflation!” and it’s a big problem then the Biden people will probably keep pounding their Fed people to do something about it..
Colander: “ I see methodologists’ failure as a systemic failure because the reason they did not point out to the profession or to policymakers that the method macroeconomists (and applied economists generally) were using was problematic was systemic; they did not see doing so as their job. They did not see their job as trying to affect economists’ methodology or even to make judgments about whether it was good or bad. Instead, they saw their job as trying to understand that methodology.”
It doesn’t just apply to Economics there are other material system disciplines using the same dialogic methodology… though this is not any more exclusive.. didactics is used at the Land Grant institutions in STEM disciplines since they were established in 1860…
And here specifically: “ They did not see their job as trying to affect economists’ methodology or even to make judgments about whether it was good or bad. “
The dialogic method doesn’t train one to be judgemental. So this shouldn’t be surprising to him.. it promotes dialog and discussion leading to a synthesis of the various theses being promulgated by the participants… compromises…
It doesn’t appear Colander understands his methodology fully either.. but he at least has some elementary level suspicion of it as applied in the Economics discipline.,,
LOL here is dummy Johnstone:
“ Science should be the most collaborative endeavor in the world”
LOL! it IS you dumb shit..
Newest Intel processor has a billion and a half transistors… you think the people there are doing moron Art degree dialogic arguing all the time?
Everyone there is in constant AGREEMENT…
V=IR … I hate to break the news to her but that is not up for debate there.., LOL!
Art degree morons: “V=IR?…. let’s debate that!”
She doesn’t even know what is going on…
Until you build a circuit that requires Fourier analysis.
Well Fourier transforms are used in filter design…
That’s the thing with the Art degree people… No ability to filter…
They are “broad gate” people..,let everything through..,
Can Art degree people handle complex numbers?
Or is their filter limited to real numbers?
They don’t have a filter… no ability to discriminate…
Beyond the real... beyond the complex... are intersectional numbers!
I could get fired or formally reprmanded if I were to share that, Peter Pan...
Speaking of which. And the real economy. With a bit of Malthus. Maybe one can autotranslate
https://youtu.be/3fod-0n2Vk4
Learn French. I'm not going to translate that for you!
The gist of her argument: Feminism failed to question or reform capitalism.
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