Re:Devaluation is austerity done right
by nickik on Thursday June 14, 2012 @04:40PM
(#4113419)
I'm not sure where mixing something up.
If the central bank targets 2% price level inflation, the economy grows 2% (witch would mean 2% of deflation in prices under the productivity norm) the central bank then has to go on and print enough money that it in a non growing economy would have hit 4% nominal inflation.
I don't see where I mix up the concepts I am always talking about price inflation.
Edit: On the blogpost, I don't think the autor really understands what NGDP targeting is about. Its about the CB not distorting relative prices, its seeing whats going on in prices. With IT you mess up the function of the price system, Hayek teaches us that prices are information. The productivity norm is basically what would happen without a central bank.
If the central bank targets 2% price level inflation, the economy grows 2% (witch would mean 2% of deflation in prices under the productivity norm) the central bank then has to go on and print enough money that it in a non growing economy would have hit 4% nominal inflation.
I don't see where I mix up the concepts I am always talking about price inflation.
Edit: On the blogpost, I don't think the autor really understands what NGDP targeting is about. Its about the CB not distorting relative prices, its seeing whats going on in prices. With IT you mess up the function of the price system, Hayek teaches us that prices are information. The productivity norm is basically what would happen without a central bank.