Discussion in 'Economics' started by morganist, Jul 19, 2009.

  1. In the next few years the likelihood of inflation is seen as a strong possibility and the cause of it is debated (if it occurs). There are a couple of opinions as to why it will occur if it does occur.

    The first being over stimulation of the money supply through the fiscal stimulus, which some economist do not believe will increase output but rather stagnate and simply devalue the currency. This is one possibility as to why the inflation position might occur. The other is less accepted the concept that there will be a reduction in the ability to increase output or a reduction in output with no increase whilst the money supply holds or increases.

    This is not a widely accepted reason for inflation since the 1970's when the augmented expectation phillips curve questioned the occurrence of such a situation. However if there is a reduction in the number of manufacturers and monopolies rise from the economic misfortune the price for goods will rise. As a result I think that it is likely that a form of price rise will come from a reduction in output ability and monopolisation over the next few years.

    When you put these two factors together namely the over increase of money supply through the fiscal stimulus and the monopolisation and price rigging that is likely to occur during the downturn I have coined the term dualflation.

    The reason for the name is based on the principle that there are two main causes for the inflated prices in the economy and that the term biflation is already used to denote when some prices are going down and some are rising.

    What do you think of that perception and terminology. Do you think it is useful.
  2. No. We don't need closet economists.
  3. dont know about the name but second scenario you mention is likely or already happening. I also believe price rigging is supported by governmet (on selective basis, i guess) which will get prices further out of line.
    link between what it cost to produce X, versus the price consumer pays has been lost. Producer of vegetable gets $0.25 per kilo and guy that transports it advertise and sells $10. Wonder what we really eat.

    one start speculating at what point paper money will start losing value and beeing considered a joke. not unimaginable any more.
  4. Illum


    When someone starts talking about the exporting of inflation going on, I'd be a happy camper to read.
  5. i am not a closet macroeconomist. i admit i am a macroeconomist. the fact of the matter is there will always be some one in charge of the economy in some way even if it is to say that there should be no regulation, the person that says that is a macroeconomist.

    i would agree that view points and strategies are less important. the tools used to control or alter economic variables are important and the future of economics should be to develop new methods of altering the variables.
  6. That makes perfect sense. It costs thousands of petro-calories to transport a lettuce-calorie from California to Manhattan. That fact should be reflected in most of the cost being taken by intermediaries.

    And yet very few people are willing to pay $0.01 a kilo more for (more) locally-sourced vegetable to ameliorate the problem.

    We are what we eat. Or, in North America, what we transport.
  7. What's a nice girl like you doing in a place like this? :D
  8. i don't understand that comment.
  9. I couldn't resist, as the phrase felt particularly appropriate.

    I was just wondering what you, a macroeconomist, were doing on a forum like this, that's all...
  10. it's an economics forum where else would i be. unlike other macroeconomists i think it is important to take other peoples opinions in consideration.
    #10     Jul 20, 2009