He both identified the source and, more important, that the disequilibrium in relative prices that needed to be corrected was among goods and services, not between goods & services and wages.
Elsewhere I wrote: "In contrast to the “fiscal view”, the “monetary view” accounts for both the rise and the fall in inflation, with the timing being “precise” (i.e. no lags!).
I do not disagree with you. I'm disagreeing with Blanchard for discounting the efficacy of monetary policy after recognizing so clearly why it was necessary!
I'm curious. I noticed you worked at the World bank and assume you may have some inner knowledge of the workings at the Fed. Has anyone at the Fed every considered making some sectors of the economy like energy say circular and not growth/inflation dependent or minimally dependent. I realize it's a very strange idea but it speaks to fundamental rights like food,clothing shelter, hopefully with education healthcare in an evolved, evolving society.
Having worked at the World Bank in no way implies any inner knowledge of the Fed and I have none. My current ques to fr inside knowledge of the Fed consists of a) finding out why Bernanke coud not get the Fed to inflate enough to prevent the Great Recessions and b) wha it is doing to get Treasury t issue shorter tenor TIPS and a Trillionth.
circular is taking out a specific sector out of the "growth" loop. The costs are measured and once all the capital is initially injected, recouped, marginal profit set, labour automated (there will be many jobs). It finds a state of equilibrium. It no longer is subject to inflationary shocks because the system becomes self sustaining until maintenance costs and upgrades are needed. You might be able to do this by state say, or by reactor, or by battery solar, stored pump hydro. It all depends on initial costs and the organizational structure, for inital capital invest, labour, materials, and marginal profit.
First I don't knw why one would WANT to remove a sector from the "growth" loop.
And "initial costs and the organizational structure, for initial capital invest, labour, materials, and marginal profit." sound like where the rest of the economy (the growth loop?) would impinge.
Because no one can directly explain why prices spike in a specific sector, like energy, ( a black box), due to money printing, off shorting, capital in flow.......blah blah. If you take a variable out of the equation, it's still growth. It's just no longer subject to all the complexity of other aspects of the system. You once qouted, Sean Carroll to me I believe. The economy runs like a set of complex system equations.
Don't feel you have to explain anymore than you want to, but price spikes in a sector (I'll stipulate they are "unexplained"), what does that have to do with wanting to take something (the unexplained sector?) out of the growth loop?
Its directly correlated to accuracy. When people study complex systems. There are many ways to approach the problem. You subtract, add, tweak to ensure you can isolate a variable. So the signal is clear. Like 1 of a hundred needles in a haystack. Accuracy is really important. Like a person’s quest for truth.
I don´t understand how you think OB has any sort of "correct" explanation!
"The odd thing is that he explains very well the origin of the shocks that correctly led the Fed to crank up inflation..."
He both identified the source and, more important, that the disequilibrium in relative prices that needed to be corrected was among goods and services, not between goods & services and wages.
Elsewhere I wrote: "In contrast to the “fiscal view”, the “monetary view” accounts for both the rise and the fall in inflation, with the timing being “precise” (i.e. no lags!).
https://marcusnunes.substack.com/p/the-relative-price-inflation-confusion
I do not disagree with you. I'm disagreeing with Blanchard for discounting the efficacy of monetary policy after recognizing so clearly why it was necessary!
I'm curious. I noticed you worked at the World bank and assume you may have some inner knowledge of the workings at the Fed. Has anyone at the Fed every considered making some sectors of the economy like energy say circular and not growth/inflation dependent or minimally dependent. I realize it's a very strange idea but it speaks to fundamental rights like food,clothing shelter, hopefully with education healthcare in an evolved, evolving society.
Having worked at the World Bank in no way implies any inner knowledge of the Fed and I have none. My current ques to fr inside knowledge of the Fed consists of a) finding out why Bernanke coud not get the Fed to inflate enough to prevent the Great Recessions and b) wha it is doing to get Treasury t issue shorter tenor TIPS and a Trillionth.
I don't understand "circular."
circular is taking out a specific sector out of the "growth" loop. The costs are measured and once all the capital is initially injected, recouped, marginal profit set, labour automated (there will be many jobs). It finds a state of equilibrium. It no longer is subject to inflationary shocks because the system becomes self sustaining until maintenance costs and upgrades are needed. You might be able to do this by state say, or by reactor, or by battery solar, stored pump hydro. It all depends on initial costs and the organizational structure, for inital capital invest, labour, materials, and marginal profit.
First I don't knw why one would WANT to remove a sector from the "growth" loop.
And "initial costs and the organizational structure, for initial capital invest, labour, materials, and marginal profit." sound like where the rest of the economy (the growth loop?) would impinge.
Because no one can directly explain why prices spike in a specific sector, like energy, ( a black box), due to money printing, off shorting, capital in flow.......blah blah. If you take a variable out of the equation, it's still growth. It's just no longer subject to all the complexity of other aspects of the system. You once qouted, Sean Carroll to me I believe. The economy runs like a set of complex system equations.
Don't feel you have to explain anymore than you want to, but price spikes in a sector (I'll stipulate they are "unexplained"), what does that have to do with wanting to take something (the unexplained sector?) out of the growth loop?
Its directly correlated to accuracy. When people study complex systems. There are many ways to approach the problem. You subtract, add, tweak to ensure you can isolate a variable. So the signal is clear. Like 1 of a hundred needles in a haystack. Accuracy is really important. Like a person’s quest for truth.