I'm regretting at all... always like a good exchange of ideas According with my System's Theory teacher, we should be more concerned with stable state (final) result than with transition behaviour (at first glance). I know, in the long run we'll be all dead. But isn't the system behaviour more important than single steps it follow during its evolution, if this evolution is well described by system design? You should explain better, because seems to me that more boom and bust is not inherently linked to more output. Fairness is not my first concern, however it is high in my values ranking. But I was applying a sistemic reasoning, my concern is that when the design of economic system counterbalance human defects (even partially) the whole system evolution could be more far from self-destruction. I feel deflation could be useful when inflation (we already had) move work (people efforts) from productive work to unproductive (parasite) work, from making something exchangeable (as in barter) to find a way to trade something at a price higher than its real value, often manipulating people psychology or currency value. Maybe individual behaviour is not enough. Individual behaviour is extremely conditioned by other people behaviour, and by environment in which they move. The system: rules, convinctions, belief, traditions, customs, rites (starting point and inner laws of the system). But think of this: if there is unemployment in US due to outsourcing to far-east, this is not an underperforming of whole system? Why lower wage output should not going to lower income people (ie far-east people) AND higher wage output isn't going to high wage people (US-citizens)? The whole world output is far more when both workers work (more total output to subdivide) than allowing jobs move from rich to poor countries. Why the system is so far from full employment? Is distance raising? Why the system works in this irrational way? A better one? Who assure it? Past knowledge? Maybe we have to start from what we know? Maybe we have to understand better what we do?
hmm i will try and answer some of your questions tomorrow if i can... the way you ask them does my head in.... im not a systems type thinker ok.... i am a subconcious intutitive one....so its a bit hard for me I will give it a shot
I think that there is enough evidence to justify saying there is going to be fairly high inflation following this recession. A very large factor in inflation is expected inflation. I think that just given the fact that enough people already believe inflation will happen is enough to assume it will. It is basically a self fulfilling prophecy.
"People" (the market) expect annualized 1.35% CPI over the next 10 years. That's certainly not high by any definition. http://www.bloomberg.com/apps/quote?ticker=USGGBE10:IND
Good. Now you've answered your own question. Go to the head of the class and stick a gold star on your forehead.