2 ms·

If there are more of something, its worth is less? If I gave a trillion dollars to every person in the nation, you think bread would still cost a dollar? Clea

If there are more of something, its worth is less? If I gave a trillion dollars to every person in the nation, you think bread would still cost a dollar? Clearly you would agree that some amount of money printing would cause inflation. At what number of dollars would we cross the threshold? $600 per person? $2000 per person? $10,000 per person? $100,000 per person? etc etc. When I say “the math must catch up with us”, all I’m saying is that if we kept doing stimulus forever, at some point it will start to matter.

throw0101a 6y ago
Inflation = quantity x velocity Velocity is low/zero, and so the product will be small/zero. People have been going on about inflation for literally a decade, since QE1 started under Bernanke: > We believe the Federal Reserve's large-scale asset purchase plan (so-called "quantitative easing") should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed's objective of promoting employment. * https://economics21.org/html/open-letter-ben-bernanke-287.html https://economics21.org/html/open-letter-ben-bernanke-287.ht... Meanwhile Keynesian folks like Krugman have been saying we're in a liquidity trap because of the ZLB on rates: * https://en.wikipedia.org/wiki/Zero_lower_bound https://en.wikipedia.org/wiki/Zero_lower_bound Japan has been in this situation for decades, and Krugman has been writing about it for just as long (1998): * https://www.princeton.edu/~pkrugman/japans_trap.pdf https://www.princeton.edu/~pkrugman/japans_trap.pdf So we have a testable hypothesis: the inflationistas have been yelling about this for over a decade, and the (e.g.) Keynesians have been saying 'we'll be fine given the conditions'. Given the (empirical) results, I'll continue to follow the Keynesians. If at some point they end up being wrong, then I'll re-consider (assuming they don't self-correct and figure out why their models got it wrong).

throw0101a 6y ago

Inflation = quantity x velocity Velocity is low/zero, and so the product will be small/zero. People have been going on about inflation for literally a decade, since QE1 started under Bernanke: > We believe the Federal Reserve's large-scale asset purchase plan (so-called "quantitative easing") should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed's objective of promoting employment. * https://economics21.org/html/open-letter-ben-bernanke-287.html https://economics21.org/html/open-letter-ben-bernanke-287.ht... Meanwhile Keynesian folks like Krugman have been saying we're in a liquidity trap because of the ZLB on rates: * https://en.wikipedia.org/wiki/Zero_lower_bound https://en.wikipedia.org/wiki/Zero_lower_bound Japan has been in this situation for decades, and Krugman has been writing about it for just as long (1998): * https://www.princeton.edu/~pkrugman/japans_trap.pdf https://www.princeton.edu/~pkrugman/japans_trap.pdf So we have a testable hypothesis: the inflationistas have been yelling about this for over a decade, and the (e.g.) Keynesians have been saying 'we'll be fine given the conditions'. Given the (empirical) results, I'll continue to follow the Keynesians. If at some point they end up being wrong, then I'll re-consider (assuming they don't self-correct and figure out why their models got it wrong).