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As an absolute layman to this field, the Friedman’s "inflation is ‘always and everywhere a monetary phenomenon’" has appeal to me in that it offers a (simple?)
by kklisura 4y ago
As an absolute layman to this field, the Friedman’s "inflation is ‘always and everywhere a monetary phenomenon’" has appeal to me in that it offers a (simple?) solution: "government austerity" as noted in the article. Whenever I read other views on inflation and even this article, they fail on providing any solution for either fixing or taming the inflation.
- pjc50 4y agoSimple, easy to understand, and ineffective solutions are always popular. The classic policy lever works just fine for the past 30 years or so in the west: whenever inflation goes up, put up interest rates. That raises the cost of credit, puts people out of work and closes marginal businesses, thereby reducing demand. If you look at https://www.macrotrends.net/countries/USA/united-states/inflation-rate-cpi https://www.macrotrends.net/countries/USA/united-states/infl... it's been kept perfectly in the 0-4% range by this process.
- throw0101a 4y ago> As an absolute layman to this field, the Friedman’s "inflation is ‘always and everywhere a monetary phenomenon’" has appeal to me in that it offers a (simple?) solution: "government austerity" as noted in the article. Government austerity is bad policy and has been for just about all of its history: * https://en.wikipedia.org/wiki/Austerity:_The_History_of_a_Dangerous_Idea https://en.wikipedia.org/wiki/Austerity:_The_History_of_a_Da... (Of course this doesn't mean spending should be done without thought.)