Macro Musings with David Beckworth This week, Ryan appeared on the Macro Musings podcast, hosted by fellow contributor David Beckworth, to talk all things The War on Prices. They discussed the coordinating role of the market price mechanism, price controls during World War II, rent control, ways firms adjust to minimum wage hikes, and who was to blame for the recent inflation surge. You can listen to (or read) the full interview
The first muse was pretty disappointing. Does Beckworth really think that “stimulus” stimulated the economy? Has he forgotten that we have a central bank that controls aggregate demand to meet its inflation target? And does he really think there is an unemployment -inflation tradeoff? That’s the idea of a Phillips Curve that MMT proponents reject.
Ditto the second muse: “The only way to explain the sort of broad inflation we’ve seen is if you see higher overall spending relative to production. Whatever could have caused that? Might it have been all the extra stimulus flowing around?” No, it is a Fed that misjudged how much inflation was needed to help relative prices to adjust to the COVID-Putin shocks.
Yep, rent control is still bad, not as bad as land use and building code restrictions, but bad.
Yes, minimum wages are still bad too. Libertarian ought to think hard about less costly ways of redistributing income. [Hint: progressive consumption taxes.]
Now that these relatively minor departures from Pareto optimum are cleared up, can we move on to immigration and net emissions of CO2?
The first muse was pretty disappointing. Does Beckworth really think that “stimulus” stimulated the economy? Has he forgotten that we have a central bank that controls aggregate demand to meet its inflation target? And does he really think there is an unemployment -inflation tradeoff? That’s the idea of a Phillips Curve that MMT proponents reject.
Ditto the second muse: “The only way to explain the sort of broad inflation we’ve seen is if you see higher overall spending relative to production. Whatever could have caused that? Might it have been all the extra stimulus flowing around?” No, it is a Fed that misjudged how much inflation was needed to help relative prices to adjust to the COVID-Putin shocks.
Yep, rent control is still bad, not as bad as land use and building code restrictions, but bad.
Yes, minimum wages are still bad too. Libertarian ought to think hard about less costly ways of redistributing income. [Hint: progressive consumption taxes.]
Now that these relatively minor departures from Pareto optimum are cleared up, can we move on to immigration and net emissions of CO2?