A stupid question to economics twitter. Why has inflation been so low for so long, despite all the money sloshing around the economy? 1. For an obvious reason I'm too basic to understand (give me links!) 2. For a subtle reason I'm too dim to understand (link me!) 3. Nobody knows
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The St. Louis Fed has your back. (I think the answer is that they’re not sure, but think it’s some combination of globalization keeping wages low and technology’s march lowering per unit labor costs.)https://www.stlouisfed.org/publications/regional-economist/first-quarter-2018/why-inflation-so-low …
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this is the first thing I googled as well and it looked credible
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I would argue we have in fact seen enormous asset price inflation, but little retail price inflation, owing to the uneven distribution of the liquidity.
Thanks. Twitter will use this to make your timeline better. UndoUndo
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Rephrased version of
@interfluidity’s take, which I think is right: - Inflation only happens when people try to buy more stuff than can be produced (in all sectors at once), causing the prices to be bid up. 1/ -
- coming out of the Great Recession, employment-to-population has been very low, so it’s always been easy to just hire a new worker to make more stuff at the same price rather than raise prices. See for data: https://www.calculatedriskblog.com/2019/09/august-employment-report-105000-jobs.html?m=1 … 2/
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