Re:2020 had some significant silver linings
by throw0101a on Saturday December 26, 2020 @11:46AM
(#25544524)
Inflation = quantity x velocity
Velocity is low/zero, and so the product will be small/zero.
People have been going on about inflation for literally a decade, since QE1 started under Bernanke:
> We believe the Federal Reserve's large-scale asset purchase plan (so-called "quantitative easing") should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed's objective of promoting employment.
So we have a testable hypothesis: the inflationistas have been yelling about this for over a decade, and the (e.g.) Keynesians have been saying 'we'll be fine given the conditions'.
Given the (empirical) results, I'll continue to follow the Keynesians. If at some point they end up being wrong, then I'll re-consider (assuming they don't self-correct and figure out why their models got it wrong).
Velocity is low/zero, and so the product will be small/zero.
People have been going on about inflation for literally a decade, since QE1 started under Bernanke:
> We believe the Federal Reserve's large-scale asset purchase plan (so-called "quantitative easing") should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed's objective of promoting employment.
* https://economics21.org/html/open-letter-ben-bernanke-287.ht...
Meanwhile Keynesian folks like Krugman have been saying we're in a liquidity trap because of the ZLB on rates:
* https://en.wikipedia.org/wiki/Zero_lower_bound
Japan has been in this situation for decades, and Krugman has been writing about it for just as long (1998):
* https://www.princeton.edu/~pkrugman/japans_trap.pdf
So we have a testable hypothesis: the inflationistas have been yelling about this for over a decade, and the (e.g.) Keynesians have been saying 'we'll be fine given the conditions'.
Given the (empirical) results, I'll continue to follow the Keynesians. If at some point they end up being wrong, then I'll re-consider (assuming they don't self-correct and figure out why their models got it wrong).