The actual goal of political economy should be the well-being of the people. Price stability can be a means to that end, but it can also diminish standards of living. Certainly, price stability is not an end in itself.
To clarify what I mean, this current inflationary period is being caused by transient supply disruptions. They’ll clear up on their own. Apart from Japan, what are the central banks of the world doing? They’re trying to throw their economies into recession. Because of transient inflation that was not caused by runaway demand.
It’s tricky to talk about actual gold standard days, since economic data aren’t very reliable that far in the past, but historical accounts don’t exactly paint a rosy economic picture. Whether there was price stability, I’m really not sure, but I do know there was mass unemployment, frequent economic crises, and widespread poverty.
Finally, the Eurozone… Their recession following the global financial crisis lasted longer than other advanced economies, because the Stability and Growth Pact is the opposite of sensible economic administration. Indeed, Europe is in a downward binge-purge spiral of—crisis happens, better ignore excessive deficit rules and let the ECB buy sovereign debt at its discretion; well the crisis is over, time to fuck up European economies again; oh no there’s another crisis, better ignore the SGP again.
At some point I might have to leave the US, so it’s a shame that Europe isn’t a viable alternative.
To clarify what I mean, this current inflationary period is being caused by transient supply disruptions.
Not at all. It’s caused by companies, especially food companies, thinking they can get away with price-gouging. Ukraine doesn’t export nearly as much wheat any more, however a) that doesn’t mean that pasta should get more expensive as Ukraine grows soft, not hard, wheat and b) speaking about the EU, we’re more than self-sufficient when it comes to soft wheat and, by and large, didn’t import from Ukraine, or anyone, for that matter. Hence also why re-organising logistics to ship Ukrainian grain to the EU to then ship onwards was not at all easy to set up.
Gas also isn’t really an issue any more. What might be a valid point is costs due to companies diversifying everything, but that’s the good kind of costs.
Their recession following the global financial crisis lasted longer than other advanced economies
…because too few member states have bouncing back from crises down as well as Germany does. It’s not a secret how we’re doing it but other states don’t seem to get that with a central bank focussed on price stability, you have to have some policies in place. Things like having a Kurzarbeit regime should probably get written into the Eurozone accession criteria because certain countries still seem to be in the “we’re going to inflate ourselves out of the situation” mindset which of course won’t work if you can’t inflate.
The actual goal of political economy should be the well-being of the people. Price stability can be a means to that end, but it can also diminish standards of living. Certainly, price stability is not an end in itself.
To clarify what I mean, this current inflationary period is being caused by transient supply disruptions. They’ll clear up on their own. Apart from Japan, what are the central banks of the world doing? They’re trying to throw their economies into recession. Because of transient inflation that was not caused by runaway demand.
It’s tricky to talk about actual gold standard days, since economic data aren’t very reliable that far in the past, but historical accounts don’t exactly paint a rosy economic picture. Whether there was price stability, I’m really not sure, but I do know there was mass unemployment, frequent economic crises, and widespread poverty.
Finally, the Eurozone… Their recession following the global financial crisis lasted longer than other advanced economies, because the Stability and Growth Pact is the opposite of sensible economic administration. Indeed, Europe is in a downward binge-purge spiral of—crisis happens, better ignore excessive deficit rules and let the ECB buy sovereign debt at its discretion; well the crisis is over, time to fuck up European economies again; oh no there’s another crisis, better ignore the SGP again.
At some point I might have to leave the US, so it’s a shame that Europe isn’t a viable alternative.
Not at all. It’s caused by companies, especially food companies, thinking they can get away with price-gouging. Ukraine doesn’t export nearly as much wheat any more, however a) that doesn’t mean that pasta should get more expensive as Ukraine grows soft, not hard, wheat and b) speaking about the EU, we’re more than self-sufficient when it comes to soft wheat and, by and large, didn’t import from Ukraine, or anyone, for that matter. Hence also why re-organising logistics to ship Ukrainian grain to the EU to then ship onwards was not at all easy to set up.
Gas also isn’t really an issue any more. What might be a valid point is costs due to companies diversifying everything, but that’s the good kind of costs.
…because too few member states have bouncing back from crises down as well as Germany does. It’s not a secret how we’re doing it but other states don’t seem to get that with a central bank focussed on price stability, you have to have some policies in place. Things like having a Kurzarbeit regime should probably get written into the Eurozone accession criteria because certain countries still seem to be in the “we’re going to inflate ourselves out of the situation” mindset which of course won’t work if you can’t inflate.