tag:blogger.com,1999:blog-53246864840716464.post6014714104745646107..comments2024-02-29T00:46:38.800-08:00Comments on Washingtons Blog: Level of Disagreement Among Economists About Inflation Highest in a DecadeUnknownnoreply@blogger.comBlogger1125tag:blogger.com,1999:blog-53246864840716464.post-3368354852805693842009-10-12T16:06:32.040-07:002009-10-12T16:06:32.040-07:00"It all depends on what you means by 'inf..."It all depends on what you means by 'inflation'." There is no standard or commonly accepted definition of "inflation." While Milton Friedman held that inflation is always and everywhere a monetary phenomenon, others hold that is a price phenomenon, and othesr hold that it is a wage (price of labor) phenomenon.<br /><br />Most importantly, however, "inflation" is also a normative term with a pejorative meaning. "Inflation (and anything that leads to it) is bad."<br /><br />Most neoclassical economists a politically libertarian and they follow Friedman and Hayek is condemning government economic intervention, which, they hold from the economic point of view, is inexorably inflationary. <br /><br />Interestingly, they did not complain about Greenspan's accommodative monetary policy and the huge deficits of the Bush administration in boom years. <br /><br />Therefore, it seems somewhat disingenuous — and also ideological — to see inflation everywhere when the US is stuck in a liquidity trap where interest rates are at the zero bound, prices are not rising generally, deleveraging is rampant, defaults abound, many asset classes have not bottomed, and wages do not look to recover anytime soon.<br /><br />If these guys are so good with numbers, where are the numbers here, other than the "big" deficits that are dwarfed by credit contraction and financial insolvency.<br /><br />This is politics, not economics.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.com