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It reads a bit like a text from people who were predicting rain everyday for last 10 years, and now when it finally rained they say "you see, we were right all

It reads a bit like a text from people who were predicting rain everyday for last 10 years, and now when it finally rained they say "you see, we were right all this time". Unless this people catalogue their specific predictions over time, and list their success rate, these articles will continue being adverts rather than demonstration what their doing is science as opposed to astrology.

ajross 4y ago
Amen. I mean, is it really so hard to view the existence of a global pandemic and related supply shock, historically large stimulus and relief packages enacted everywhere, and a subsequent petroleum supply crisis due to a (deeply weird) war entered by a major producer as... ...a big, whopping outlier in the data set? I mean, really? Who anywhere genuinely believes that the economic events of 2020-22 could be reliably predicted from first principles?
- Bostonian 4y ago
  The price level depends on the money supply and the amount of goods available. It was predictable that giving people more spending power when production was lower would case inflation.
  - ajross 4y ago
    Then why did it take two years? Supplies were low and savings rates were high in 2020, too. Yet inflation didn't start growing until well after the omicron wave had subsided. Why? Nothing happened economically in January of 2022 that should have triggered anything notable economically. There was no new relief package. No change in supply chains (though the Shanghai shutdown was about to happen). Yet... inflation started to spike then. It's not hard to guess at an answer: the covid recovery led to a loosening of purse strings that were kept tight during lockdowns out of general social anxiety. Makes enough sense to me. But it's still a special-case answer to a special case thing. First principles economics, in fact, would have done extremely badly.

ajross 4y ago

Amen. I mean, is it really so hard to view the existence of a global pandemic and related supply shock, historically large stimulus and relief packages enacted everywhere, and a subsequent petroleum supply crisis due to a (deeply weird) war entered by a major producer as... ...a big, whopping outlier in the data set? I mean, really? Who anywhere genuinely believes that the economic events of 2020-22 could be reliably predicted from first principles?

Bostonian 4y ago
The price level depends on the money supply and the amount of goods available. It was predictable that giving people more spending power when production was lower would case inflation.
- ajross 4y ago
  Then why did it take two years? Supplies were low and savings rates were high in 2020, too. Yet inflation didn't start growing until well after the omicron wave had subsided. Why? Nothing happened economically in January of 2022 that should have triggered anything notable economically. There was no new relief package. No change in supply chains (though the Shanghai shutdown was about to happen). Yet... inflation started to spike then. It's not hard to guess at an answer: the covid recovery led to a loosening of purse strings that were kept tight during lockdowns out of general social anxiety. Makes enough sense to me. But it's still a special-case answer to a special case thing. First principles economics, in fact, would have done extremely badly.