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> ...and others use a more complicated metric trying to get at how people and businesses feel... Yeah, agreed, but i wonder how much of what will happen is mor

> ...and others use a more complicated metric trying to get at how people and businesses feel... Yeah, agreed, but i wonder how much of what will happen is more self-fulfilling prophecy, where a critical mass amount of people "feel lousy", and hence unconsciously push all sets of invisible levers of the economy which push the world/countires/companies into something closer to a recession. I'm going to call the global economy the "mopey teen economy"...because even if things are not "that bad", the consensus will make everyone feel like things are not so great. ;-)

jfengel 4y ago
In the 1970s, Jimmy Carter got hammered for saying that. The threat is nearly invisible in ordinary ways. It is a crisis of confidence. It is a crisis that strikes at the very heart and soul and spirit of our national will. We can see this crisis in the growing doubt about the meaning of our own lives and in the loss of a unity of purpose for our nation. The situation was worse then, but oil played a huge part in both. It wasn't just malaise. A key input had gone up, causing genuine inflation, regardless of monetary policy. (The solution in the 1980s was a massive expansion of government debt, with the same expansion of the money supply as the Fed could do with low rates.) As always, there is a lot of politics: some people want the economy to feel bad, others don't. Today we have a lot more vigorous public square holding the same old discussions.
- taolegal 4y ago
  > causing genuine inflation There's something obfuscatory about calling this inflation instead of what it fundamentally is: scarcity. I get that inflation means a price rise, but inflation is (or should be) fundamentally about monetary policy (devaluing money) rather than supply and demand.
  - jfengel 4y ago
    The term predates monetarism. It means price rises of all kinds. It's difficult enough to condense prices into a single measure without distinguishing what causes what. All the economists want for that term is to say, "Here is a standard basket of goods, and here is the average price paid for it." Even that much is hard enough to do that it requires a government bureau to do the calculation. It would add extra confusion to redefine the term "inflation" to refer solely to price changes caused by monetary policy rather than supply or demand. Economists are likely to continue to use the term to mean what they've meant by it for over a century.
    - taolegal 4y ago
      > It means price rises of all kinds. but my point is that isn't the idea of "genuine" (like you said) inflation almost useless to say then? what's a fake rise in prices?

jfengel 4y ago

In the 1970s, Jimmy Carter got hammered for saying that. The threat is nearly invisible in ordinary ways. It is a crisis of confidence. It is a crisis that strikes at the very heart and soul and spirit of our national will. We can see this crisis in the growing doubt about the meaning of our own lives and in the loss of a unity of purpose for our nation. The situation was worse then, but oil played a huge part in both. It wasn't just malaise. A key input had gone up, causing genuine inflation, regardless of monetary policy. (The solution in the 1980s was a massive expansion of government debt, with the same expansion of the money supply as the Fed could do with low rates.) As always, there is a lot of politics: some people want the economy to feel bad, others don't. Today we have a lot more vigorous public square holding the same old discussions.

taolegal 4y ago
> causing genuine inflation There's something obfuscatory about calling this inflation instead of what it fundamentally is: scarcity. I get that inflation means a price rise, but inflation is (or should be) fundamentally about monetary policy (devaluing money) rather than supply and demand.
- jfengel 4y ago
  The term predates monetarism. It means price rises of all kinds. It's difficult enough to condense prices into a single measure without distinguishing what causes what. All the economists want for that term is to say, "Here is a standard basket of goods, and here is the average price paid for it." Even that much is hard enough to do that it requires a government bureau to do the calculation. It would add extra confusion to redefine the term "inflation" to refer solely to price changes caused by monetary policy rather than supply or demand. Economists are likely to continue to use the term to mean what they've meant by it for over a century.
  - taolegal 4y ago
    > It means price rises of all kinds. but my point is that isn't the idea of "genuine" (like you said) inflation almost useless to say then? what's a fake rise in prices?