3 ms·
A feedback loop makes sense, but the problem still seems to be that the counter-cyclical stimulus ends up being immortal. OK so if we aren't all devaluing our
by dforrestwilson 9y ago
A feedback loop makes sense, but the problem still seems to be that the counter-cyclical stimulus ends up being immortal.
OK so if we aren't all devaluing our currencies lower and lower what explains the deflation we have been witnessing across the globe?
- CalChris 9y agoYes, feedback loops loop. That's what they do. The trouble with open loops is that they crash and crashes are really bad. Keynesianism came to the forefront after the Great Depression which was horribly mismanaged by conservatives free market zealots. Crashes are really really bad. Roosevelt came into office with 25% unemployment. Let me say that again. Crashes are really fucking bad and are to be avoided. In the US we currently have low inflation (1-2%) but not deflation. Same with Europe.
- dforrestwilson 9y agoIt sounds like you are ignoring Libor, and excluding food and fuel from your CPI.....
- CalChris 9y agoI am certainly excluding Libor (which would be very strange to include) and I'm definitely not excluding food and fuel from the CPI. Airline Fares Cable Television Household Fuels Leased Cars Lodging Away from Home Medical Care Motor Fuels Motor Vehicle Insurance New Vehicles Personal Computers and Peripheral Equipment Rent and Rental Equivalence Telephone Services Tuition and Fees, College Tuition and Fees, Elementary and High School Used Cars and Trucks https://www.bls.gov/cpi/ https://www.bls.gov/cpi/ Looking at Libor, it has never been in deflation in 30 years: http://www.macrotrends.net/1433/historical-libor-rates-chart http://www.macrotrends.net/1433/historical-libor-rates-chart
- dforrestwilson 9y agohttp://www.economonitor.com/blog/2017/06/negative-rates-part-1-beyond-the-zero-bound/ http://www.economonitor.com/blog/2017/06/negative-rates-part...