AOC's Question on Inflation - Is She Correct?

[Philip]

Interesting to question:

https://www.foxnews.com/politics/trump- ... -fed-chair

[PaulSacramento]

Yes, and no.
The economy in the US is very different today than 20 years ago,much less 50 years ago.
Yes, basic inflation still kind of works the same way, but that is only part of the picture.

[Philip]

Paul: Yes, and no.The economy in the US is very different today than 20 years ago,much less 50 years ago.
Yes, basic inflation still kind of works the same way, but that is only part of the picture.

But the evidence seems far from clear cut - AND if things are very different, then why are we employing the same fiscal approach about inflation? Is that approach STILL valid, given the evidences of the last two decades? It's an important question to ponder.

[edwardmurphy]

I don't know if she's right, but it's an interesting topic. I'll look more into it later.

That said, some of the comments in that article make me nervous, as does talk of lowering interest rates again. I think that we're overdue for a massive market correction, but Trump wants to do is stomp harder on the gas pedal. That's always fantastic for the billionaires, since it allows them to get a larger share of the pie for pennies on the dollar, but the rest of us will be hurt badly.

[PaulSacramento]

Paul: Yes, and no.The economy in the US is very different today than 20 years ago,much less 50 years ago.
Yes, basic inflation still kind of works the same way, but that is only part of the picture.

But the evidence seems far from clear cut - AND if things are very different, then why are we employing the same fiscal approach about inflation? Is that approach STILL valid, given the evidences of the last two decades? It's an important question to ponder.

The technology sector has thrown a wrench into a lot of predictive models.
Also, there is the issue of "under employment" VS Unemployment, something that was a non-issue ( or at least a very minor one) in the past.
There is also the economy that is driven by new construction ( housing market), that is far more impactful and critical than it was when most of these economic theories and models were being created.