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I would say yes, there's definitely a delay. The price of the beef in your Big Mac was negotiated years ago. Ongoing supply contracts (which are made when compa

I would say yes, there's definitely a delay. The price of the beef in your Big Mac was negotiated years ago. Ongoing supply contracts (which are made when companies feel confident about the prospect of inflation in the economy) probably significantly increase the time it takes to manifest economy-wide inflation. At the instant of printing money they have not changed underlying economic production, but they have created more dollars in the economy with which people can use to compete to buy things, thereby pushing prices up. Not sure if you are using the quote in the article as the one sentence definition here.

UncleMeat 4y ago
If there is a many-year delay (to account for the low observed inflation during years of monetary intervention during the 2010s), then why are people blaming today's inflation on printing during the past two years? My point is that people often claim that inflation is tied very tightly to printing and that the government is full of idiots who should have known that printing would cause high inflation. The post that triggered my comment was the following. > I found Yellen's comments staggering - having to apologize for not seeing inflation coming - after the US increased money supply 40% from 2020-2022. > What other pretty basic economic realities are not being considered by our leaders? Yet it is clearly more complex than this, since simple relationships between printing and inflation do not account for the last decade of observed printing and inflation.
- lend000 4y ago
  > My point is that people often claim that inflation is tied very tightly to printing and that the government is full of idiots who should have known that printing would cause high inflation. Whether the people in government are idiots or not, it almost is always politically expedient to err on the side of printing more money, since politicians and politically appointed bureaucrats typically seem to be more focused on the short term (the next election) until there is uncontrolled inflation. That being said, I don't think we've had a president who had a strong intuition for economics since Eisenhower. > Yet it is clearly more complex than this, since simple relationships between printing and inflation do not account for the last decade of observed printing and inflation. How so? We've had inflation for the last decade, and we've had rising wealth inequality on top of consumer inflation (which I consider to be a different type of inflation), which can largely be attributed to increases in the money supply and broken graduated income tax brackets. The central issue here seems to be that you are not differentiating between the magnitude of money printing last time around (which did indeed affect prices throughout the market over the decade) and the unprecedented magnitude during the pandemic. > If there is a many-year delay (to account for the low observed inflation during years of monetary intervention during the 2010s), then why are people blaming today's inflation on printing during the past two years? 2 years is a long time. While commodities, equities, and real estate started exploding pretty quickly, it took a little over a year for consumer prices to start increasing at an unsettling rate. But just because there is some hysteresis, does not mean it takes 10 years.

UncleMeat 4y ago

If there is a many-year delay (to account for the low observed inflation during years of monetary intervention during the 2010s), then why are people blaming today's inflation on printing during the past two years? My point is that people often claim that inflation is tied very tightly to printing and that the government is full of idiots who should have known that printing would cause high inflation. The post that triggered my comment was the following. > I found Yellen's comments staggering - having to apologize for not seeing inflation coming - after the US increased money supply 40% from 2020-2022. > What other pretty basic economic realities are not being considered by our leaders? Yet it is clearly more complex than this, since simple relationships between printing and inflation do not account for the last decade of observed printing and inflation.

lend000 4y ago
> My point is that people often claim that inflation is tied very tightly to printing and that the government is full of idiots who should have known that printing would cause high inflation. Whether the people in government are idiots or not, it almost is always politically expedient to err on the side of printing more money, since politicians and politically appointed bureaucrats typically seem to be more focused on the short term (the next election) until there is uncontrolled inflation. That being said, I don't think we've had a president who had a strong intuition for economics since Eisenhower. > Yet it is clearly more complex than this, since simple relationships between printing and inflation do not account for the last decade of observed printing and inflation. How so? We've had inflation for the last decade, and we've had rising wealth inequality on top of consumer inflation (which I consider to be a different type of inflation), which can largely be attributed to increases in the money supply and broken graduated income tax brackets. The central issue here seems to be that you are not differentiating between the magnitude of money printing last time around (which did indeed affect prices throughout the market over the decade) and the unprecedented magnitude during the pandemic. > If there is a many-year delay (to account for the low observed inflation during years of monetary intervention during the 2010s), then why are people blaming today's inflation on printing during the past two years? 2 years is a long time. While commodities, equities, and real estate started exploding pretty quickly, it took a little over a year for consumer prices to start increasing at an unsettling rate. But just because there is some hysteresis, does not mean it takes 10 years.