Specifically, krugman believes that inflation is required to confuse laborers to stay in their jobs and not take pay cuts (sorry, can't find ref), which creates labor stability.
so yes, it is about economists. interest rate policy is crafted around this principle and designed to screw the have nots (it is not only krugman, it is encoded in the fed's dual mandate). since every country has a central bank with a similar mandate its hard to know if gettimg screwed is inherent in captalism or if it's only a feature of central bank capitalism.
It's maybe telling that the nordic central banks have the lowest interest rates in general
> The gap between haves and have nots is more related to politics than economics IMO
in human history there have been few societies that haven't had a widening gap; gaps typically have contracted during times of revolution. no social democracy in the current epoch doesn't feature a widening gap, so i would doubt that active redistribution helps all that much (inflation is a compounding effect that overtakes all redistribution)
He is explaining a market dynamic, not prescribing a political policy. He's correct: with zero inflation, normal market dynamics means that some jobs become less valuable over time, and others become more valuable. This is natural progress caused by all kinds of factors like scientific advancements. In such an environment, it is very difficult for employers of the now antiquated jobs to cut wages. So they simply cut jobs instead, leading to higher unemployment. Inflation mitigates this effect by effectively giving workers of antiquated jobs pay cuts (in real terms) rather than firing them. What politicians do with this knowledge is a policy choice. You are shooting the messenger.
You cant be serious. Inflation is a policy. it is mandated in the fed charter. and at the end of the article, he says "let's have more inflation". he is prescribing it.
> rather than firing them
Absolutely nuts outcome. why dont we enable capital to be lazy terrible dishonest management instead of having them actually respond to market forces with hard truths and look their employee in the eye and fire their employee. what could go wrong with this sort of social policy?
I strongly disagree with your policy prescription. I would prefer lower unemployment. Workers are still free to leave their jobs and seek out better wages. It's just that they're no longer forced out, and I think that's an objectively better outcome.
well im sorry your worldview has been captured by depressing corporate fetish of measurement and Goodhart's law.
imagine a society where not everyone had to be employed. some could afford to stay at home and take care of the kids, or take care of someone else's kids, the elderly, or just do random social improvement activities.
well in a society incentivized to maximize the employment statistic, the society will craft policies to incentivize people to be employed, and a lot of unemployable social good will be imobilized and the capacity to do it will be undeployed. by far the worst mechanism to do this is inflation, whose mechanism of incentivizing individuals to be and stay employed is a compounding treadmill which if you fall off, youll be homeless or foodless or both.
so yes, it is about economists. interest rate policy is crafted around this principle and designed to screw the have nots (it is not only krugman, it is encoded in the fed's dual mandate). since every country has a central bank with a similar mandate its hard to know if gettimg screwed is inherent in captalism or if it's only a feature of central bank capitalism.
It's maybe telling that the nordic central banks have the lowest interest rates in general
> The gap between haves and have nots is more related to politics than economics IMO
in human history there have been few societies that haven't had a widening gap; gaps typically have contracted during times of revolution. no social democracy in the current epoch doesn't feature a widening gap, so i would doubt that active redistribution helps all that much (inflation is a compounding effect that overtakes all redistribution)