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> Inflation should take care of demand. Indeed, may as well buy now (if you can) since you'll get less for the same money in the future. > The higher prices w
by adolph 5y ago
> Inflation should take care of demand.
Indeed, may as well buy now (if you can) since you'll get less for the same money in the future.
> The higher prices will bring demand in alignment with supply.
Unless the stimulus cash injection policy allows people to continue to buy now (see above).
- taylodl 5y agoWith everything opening back up and experiencing a labor shortage it would be very difficult to justify any further stimulus monies. I don't think we have to worry about that. Economists expected a rise in inflation due to stimulus spending in 2020 - that had already been factored in to their forecasts. What has surprised them is the rate of inflation is higher than expected. I'm arguing the reason they're surprised is they were only considering financial policy and not also including the effects of constrained supply - which is also why they also missed forecasting a shrinking economy.
- adolph 5y agoHayek’s greatest contribution to economics was to show that society is far more complex than we realize, with little pieces of knowledge dispersed among millions of individuals. “The curious task of economics,” he famously wrote in “The Fatal Conceit,” which he published in 1988, “is to demonstrate to men how little they really know about what they imagine they can design.” https://www.washingtonpost.com/news/volokh-conspiracy/wp/2014/10/13/f-a-hayek-and-the-pretense-of-knowledge/ https://www.washingtonpost.com/news/volokh-conspiracy/wp/201...