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This. Economists may not studied hyperinflations much, they've spent a lot of time looking at inflation, the one economic variable public policy designed by ma

This. Economists may not studied hyperinflations much, they've spent a lot of time looking at inflation, the one economic variable public policy designed by mainstream economists is very good at predicting and influencing. They know it's the result of the amounts people are willing to spend on stuff (including labour) rising faster than the amount of stuff available. They know that government spending more money into the economy can does increase the amount people are willing to spend on stuff (but seldom 1:1) and that it can also increase (or decrease) the amount of stuff available. They know this relationship depends on how the money is spent and also on the structure of the economy and this varies over the economic cycle as well as between countries. They know people look forward with inflation expectations when setting contract prices and wage demands. There really isn't much reason to assume inflation, a rate of change, has a stable relationship with the absolute size of the debt. It seems like the article was inspired by Rogoff and Reinhart's similar argument that a particular debt/GDP ratio was an inflection point leading to a drop in economic growth. But that paper's arguments for there being a specific amount of debt that was the problem were empirical rather than theoretical, and more importantly, were wrong (infamously the paper's main result was shown to be the result of a coding error accidentally excluding countries from their calculation)

jedharris 6y ago
Recently the Fed hasn't been good at getting inflation to 2% (their published target) and economists haven't been good at predicting whether the Fed will succeed, or modeling why the Fed has failed. Noah (article) doesn't emphasize this but he does refer to it. We don't really understand ordinary inflation much less hyper-inflation. Even the cause of the famous period of inflation in the 1970s is still very much debated.
- notahacker 6y ago
  The Fed faces exactly the opposite challenge to hyperinflation though (and there's no shortage of literature about zero lower bounds and liquidity traps, and no real surprise economies find themselves [back] in one) But my point isn't that we know everything about inflation, it's that we know some spending is more likely to trigger it than others and so asking 'how much' the government can borrow before triggering hyperinflation is asking the wrong question, not least because expectations are known to have a large impact on inflation and so Goodhart's Law applies. And whether the current macroeconomic policy emphasis on stabilising inflation is excessive[1] or not, we definitely do know ways to get inflation down [1]a more usual line of criticism than arguing economists don't study inflation enough!

jedharris 6y ago

Recently the Fed hasn't been good at getting inflation to 2% (their published target) and economists haven't been good at predicting whether the Fed will succeed, or modeling why the Fed has failed. Noah (article) doesn't emphasize this but he does refer to it. We don't really understand ordinary inflation much less hyper-inflation. Even the cause of the famous period of inflation in the 1970s is still very much debated.

notahacker 6y ago
The Fed faces exactly the opposite challenge to hyperinflation though (and there's no shortage of literature about zero lower bounds and liquidity traps, and no real surprise economies find themselves [back] in one) But my point isn't that we know everything about inflation, it's that we know some spending is more likely to trigger it than others and so asking 'how much' the government can borrow before triggering hyperinflation is asking the wrong question, not least because expectations are known to have a large impact on inflation and so Goodhart's Law applies. And whether the current macroeconomic policy emphasis on stabilising inflation is excessive[1] or not, we definitely do know ways to get inflation down [1]a more usual line of criticism than arguing economists don't study inflation enough!