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请停止夸大通胀威胁

Oct 29, 2019 J. Bradford DeLong

发自伯克利—美国当前的宏观经济状况令我回想起了2014年9月。当时美国失业率降到了6％以下，同时一大批评论员向我们保证通胀很快就会如菲利普斯曲线所预测的那样上升。当然，这一论点的必然推论是美联储应当迅速着手实施货币政策正常化，缩小货币基础，并将利率提高到原本的“正常”范围。

时至今日，美国的失业率比我们都确信经济已经达到“自然”失业率时的水平还低了2.5个百分点。当我在1990年代担任助理教授时，经验告诉我们如此低的失业率会使每年的通胀率增加1.3个百分点。如果今年的通货膨胀率为2％，那么明年通胀率则为3.3％。如果失业率能保持在同样的总体水平，那么第二年的通货膨胀率将是4.6％，第二年的通货膨胀率将是5.9％。

但是这一旧经验已经不再适用。在接下来的几年中，美国的通胀率始终保持在每年2％左右，我们的货币政策选择也应当回应这一事实。

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J. Bradford DeLong

Writing for PS since 2002
254 Commentaries

J. Bradford DeLong is Professor of Economics at the University of California at Berkeley and a research associate at the National Bureau of Economic Research. He was Deputy Assistant US Treasury Secretary during the Clinton Administration, where he was heavily involved in budget and trade negotiations. His role in designing the bailout of Mexico during the 1994 peso crisis placed him at the forefront of Latin America’s transformation into a region of open economies, and cemented his stature as a leading voice in economic-policy debates.

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B Wilds Nov 13, 2019

Central banks across the world claim the lack of inflation is the key force driving their QE policy and permitting it to continue. This is central to their ability to stimulate. The moment inflation begins to take root much of their flexibility will be lost.

We should not be deceived or led to believe that lower oil and commodity prices will in themselves bring about deflation. Often falling prices in both commodities and goods reflect a lack of demand or temporary supply imbalance that will correct itself. When that happens prices tend to rapidly adjust to reflect the "new reality of the day." The article below delves into the inflation or deflation debate.

https://brucewilds.blogspot.com/2019/10/inflation-or-deflation-which-defines.html
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D. V. Gendre Nov 4, 2019

The elicitation for the rate of unemployment has been changed since Clinton! But when looking at the rate of unemployment plus marginally attached workers and those woking part time because of economic reasons the rate of unemployment is still at 7%!

Having said that it seems that even Professors didn't notice the severe changes in the world economy since 1989! The world doesn't consist of North America, Europe, Australia, New Zealand and Japan anymore. Cheap goods from Asia, the increase of capacity in goods and services, has not only put pressure on the prices of goods and services but also on wages and therefore on inflation. As we know wages are stagnant for decades now.

In the seventies the average US consumer spent 15% on food (in the 50's even 22%!). Today it is about 6.6%. Prices and spending has changed and therefore the basket for calculating the CPI must have changed dramatically! As a professor one should know that you can't compare apples with oranges. Even the product range has increased dramatically in the past decades. Today's economy has much more surrogates and substitutes where consumers can shift and optimize spending and "control" inflation.

Furthremore it seems that most economists today forgot that only money in circulation creates demand and therefore influencing prices. But if one includes art, stock marekts, luxury goods etc. into the CPI one would see that we indeed have high inflaiton in sectors where cheap money flows first (see Ockham). But those sectors do usually not effect the average Joe directly and CPI.

Then we have much more sophisticated payment methods today then we had 50 years ago. Velocity of money therefore dropped rapidly and so did inflation of course. Excess money "disappers" right away since many transactions are cleared by money transfers from one bank to the other (or from the credit institutions). Today it is harder for excess money entering the economic cycle, since money not in use will just stay on the bank account and therefore not create any demand. There are also fewer unbanked people.

Then the personal savings rate increased from 2.2% in 2005 to 8.3% in 2019! This does not only suppresse inflation but it is acutally increasing the value of the dollar and causing deflationary pressure.

Furthermore there is a distinct difference between inflation due to increasing money supply (which is held as excess reserves at the FED) and for example increasing demand or decreasing supply of goods and services. The US consumer today has not the power to increase demand for goods and services so it would substantially increase prices, since wages didn't really increase since decades. And in contrast to 50 years ago the money of the consumer is today spread on a huge variaty of goods and services that even didn't exist 50 years ago and that makes it actually quite hard to increase demand in all those products at once. This puts deflationary pressure on all those new goods and services.

Interesting that a lot of economists are looking suddenly for new economic theories (see MMT) when they can't explain or see what's happening right in front of their eyes and aren't even noticing the most severe transfomations in the economy. It is as these economists are still looking on horse carriage wheras the economy runs on a car with combustion engine or should I say EV.

To apply the Phillips curve in such a blunt way without considering the above is a pity.
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Naomi Chakwin Nov 3, 2019

The Germans are still allergic to the most remote possibility or thought of inflation. It can take a long time.
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Thaomas H Nov 2, 2019

Regardless of the employment rate, if the average inflation over since setting the target were below 2% why would a Fed with price stability mandate start making monetary policy less stimulative? And where does the idea of a "normal" interest rate come from? If interest rates are an instrument for moving prices and employment up or down, why talk about them as if THEY were targets?

Monetary policy should not pay any more or less attention to inflation now than before, just make use that the Price level stays on it’s target trend.
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Sagar Rachh Oct 29, 2019

Post 1988, the macroeconomics were largely influenced by the rise of China as a supplier of low cost inputs and finished products. Even if there was a reduction in unemployment, the reducing cost of products with advancement in technology did not cause any significant rise in inflation. So the impact of policy rates and globalization (the latter creating a larger impact) on inflation has been more profound in the last 30 years.
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