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I am not an economist, but I think it's the opinion of many that the only way to defeat inflation is to tip the economy over, and the more the economy resists t
by jhickok 3y ago
I am not an economist, but I think it's the opinion of many that the only way to defeat inflation is to tip the economy over, and the more the economy resists the higher rates have to go, and the worse the tipping over event is going to be.
- matwood 3y agoExcept that inflation has gone down as fast as it went up. The Fed has paused rate increases to see if what they have already done is enough. The talk of lowering rates is because the Fed doesn't want to overshoot on the way down.
- Xeoncross 3y agoNo, inflation has not gone down. The rate of inflation growth has gone down.
- orangecat 3y agoNo, inflation has not gone down. It has. Inflation is the derivative of prices. Prices are increasing but less rapidly than before, which means that inflation has decreased.
- bratwurst3000 3y agoDon’t you mean the rate of inflation is down? Prices are growing so they are inflating and not deflating. I am an idiot so beeing wrong is my thing. https://en.m.wikipedia.org/wiki/Deflation https://en.m.wikipedia.org/wiki/Deflation
- ekidd 3y agoInflation is the rate of change of prices. In calculus terms, it's the first derivative of price. (I'm not sure what you mean by "the rate of inflation growth." Do you mean the second derivative of price, maybe?) Inflation has gone down in the US. The last few months, if you extrapolate them to an annual rate, would (I think) be between 2 and 3%, which is the Fed's normal target. Unfortunately, some of the recent price increases may stick. However, the US has seen strong wage growth, and many areas have high demand for labor. I've seen a surprising number of businesses with 1/4th of their usual positions open. It's a good time to apply to better-paying jobs. Not so much in the tech industry, but in other industries. On the other hand, with rates as high as they are, it's an awful time to buy a house or a car using a loan.
- Xeoncross 3y agoYes, my mistake. I meant the effects of inflated prices. When people say inflation is dropping they sometimes confuse that with prices going down instead of the rate of inflation simply slowing.
- jhickok 3y agoThe rate of inflation is still about 50% higher than their stated objective. They want to pause to review like you mentioned in an attempt to nail the soft landing, but there is legitimate concern that inflation will remain too high and the Fed is going to break things in their search for 2%.
- marcosdumay 3y agoThe amount of plain common-sense economics that everybody just accepts as obvious but is completelly bullshit is amazing.
- stevenAthompson 3y agoCommon sense is what you call something when you can't explain yourself.
- marcosdumay 3y agoIn other areas, common sense tends to not be absolute bullshit as often as in economics. Usually just the fact that something never works like the common sense implies is enough to remove a fact from the popular culture.
- SAI_Peregrinus 3y agoInflation is the rate of change of prices. As long as it's positive, prices will keep increasing. Inflation has gone down, but has not become negative (has not turned into "deflation").
- stevenAthompson 3y agoCan you be more specific? Which part of economics do you believe should be removed as a fact from popular culture?
- bratwurst3000 3y ago„The market regulates itself“ is certainly one. „Everything gets cheaper“ is another one.
- marcosdumay 3y agoHum... You can look abou 3 comments upthread. That's a widely popular fact. And yet there doesn't seem to be any correlation between growth and any positive amount of inflation. (There is a lot of correlation for negative inflation.) Even the idea that "inflation" is something simple to define and measure is wrong.