Comments: Is Monetary Policy Stagnating Hourly Wages?

The relation of unemployment to inflation is called The Phillips Curve and it has a rejuvenation capacity that Freddy Krueger would envy. It should have been discredited by the Volker Fed's slaying the stagflation beast with a strong dollar.

But but but but -- is my blog brother campaigning for looser money or accusing the Fed of driving up unemployment by tightening too quickly? Is gravity still 9.8 m/sec2?

Posted by jk at September 5, 2014 9:53 AM

I'm not advocating anything yet, since I don't really understand what's going on. But in principle, if the FED has to rig the money supply such that the economy can't grow as much as it would otherwise do, that is objectionable. If their fiat currency "inflates" because too many goods are being produced too fast then find some other way to regulate the stupid currency. You're smart guys, right? You think your smart enough to manage the whole freakin' economy.

What I'm after is so much job growth that workers can pick and choose from more good options, with higher wages. Sort of a "We're all North Dakota now" strategy, without the funny accent and nine months of winter. So many jobs that nobody will object to more immigration. What's wrong with this idea? Who wants to keep it the way things are? Unions? Simpleton central bankers? Politicians who want to keep the country polarized?

Posted by johngalt at September 5, 2014 12:29 PM

Changes in hourly wages have to be adjusted for inflation. Real wages fell 1% in 2011 because inflation was still 3%, but the same hourly change in nominal wages became a 0.7% rise in real wages in 2013 and 2014.

Posted by Alan Reynolds at March 16, 2015 8:00 AM
Post a comment










Remember personal info?