No, that’s easy to say, but that's not what they are saying, which is substantially more nuanced.
What they are saying is more “there are times when demand drops within one or more sectors of the economy, such that production with wages in that sector at their pre-decline levels would not be sustainable. The result is either moderate cuts to real wages or cuts to production that cut jobs with much larger ripple effects throughout the economy.
“Because nominal wages are sticky against downward adjustment, in the absence of inflation, the result tends to be job cuts with the immediate effect of unemployment plus the ripple effects that unemployment and the associated production cut entails. With moderate inflation, real wages in the effected sectors can be cut modestly without cutting nominal wages, avoiding productivity/job cuts and minimizing ripple effects. This has much more modest effects outside of the target sector, and avoids the worst effects (job losses) in the target sector.
“Also, easy money policies can sometimes avoid the demand drops leading to the choice between real wage cuts and productivity cuts in the first place, short-circuiting the problem instead of merely mitigating it's effects.”
I’m not sure why I would need to go that far afield when I can just deal with the actual words spoken by actual economists where they literally say this with slighty obscurant language. This isn’t a “shadowy cabal,” its mainstream media and economics here.
If the actual intent of economic policy is so threatening to your worldview that you need to poison the well by invoking shadowy conspiracies, perhaps you should re-evaluate your own perspective on the issue.
> I'm just going to call you a conspiracy theorist because it's probably not worth arguing with you, and "the amount of energy needed to refute bullshit is an order of magnitude larger than to produce it."
Yeah it would probably require an infinite amount of energy to refute my assertions, since they are actually true. And I think we are beyond considering the existence of the central bank to be a “conspiracy theory”, it’s kind of established.
Other than the quotes from the op that started this thing, you can go read the NYT resident economist Paul Krugman on “sticky wages” and inflation. Its paywalled (so I won’t provide a link) but should be the first results on any search engine.
> If you think your assertions are "actually true" then back them up.
This comment thread started because the first thing I quoted was an economist asserting this in obscurant language. I suggest you re-read from the beginning.
Should be obvious from the discussion, especially for someone who “knows quite a bit” about the subject.
> Hi yes I know quite a bit about sticky wages and inflation.
Then why did you ask me for a source for a statement that is well understood among anyone who has studied the subject? Krugman’s statements to this effect are so well-known as to have been written about in other publications.
Back to the original statement: Is it that hard to say “we think wages among the working class are too high so the central bank depreciates the currency”? well is it?
You claim that central banks depreciate the currency because they "think wages among the working class are too high." But rhetorically, you are doing more than just referring to the explanation I gave above. You are implying that central banks "think" working class wages are too high, and want to lower them to hurt working class people.
Which is the opposite of the standard explanation - the purpose of inflation in that instance is to implicitly reduce the downward rigidity of wages so that employment does not contract as much in a downturn.
Presumably you, champion of the working class, would rather more people be unemployed?
You've posted a ton of these and it's not what this site is for.
How fortunate for the capitalist that he can retain his entire workforce by paying them less and they are not even likely to notice.
> You claim that central banks depreciate the currency because they "think wages among the working class are too high." But rhetorically, you are doing more than just referring to the explanation I gave above. You are implying that central banks "think" working class wages are too high, and want to lower them to hurt working class people.
Banks wanting to hurt working class people is an unnecessary hypothesis. they merely want to help their friends who own businesses and would like to pay less in real terms for their workforce.
> the purpose of inflation in that instance is to implicitly reduce the downward rigidity of wages so that employment does not contract as much in a downturn.
give workers a stealth way cut so the business can afford to keep all of them, yeah, I get it.
> Presumably you, champion of the working class, would rather more people be unemployed?
I want them to be unemployed the same way you want them to be tricked into making less real money.
You've posted a ton of these and it's not what this site is for.