How to tame inflation

27 Jun, 2022 at 13:20 | Posted in Economics | 7 Comments

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7 Comments

  1. Agreeing with Kingsley’s criticisms of Kelton’s inflation story and religious-like policy prescriptions, may I again present the Modern Mother#^<%ing Money Theory (M^3T) solution: inflation-index CBDC basic income accounts?

    Comment by rsm— 29 Jun, 2022 #

  2. In a number of posts and summaries of articles posted on my wall I have demonstrated that the problem of rising prices is caused by the lockdown events, the war in Ukraine and the series of sanctions imposed not only on Russia but also on Iran, Venezuela, China and the civil war in Libya. Theoretically, monetary policy contraction will only do recession damage as the drop in demand from rising prices and market interest rates (not central bank rates!!!) and the adverse wealth effects of the shortfall in financial markets is already causing the gradual reduction in output prices

    Comment by Panayotis Economopoulos— 28 Jun, 2022 #

  3. Kelton now claims that the interview posted here “was over before I got a chance to make a number of important points”.
    …”There are so many things we could be doing—together—to crush inflation.“
    – https://stephaniekelton.substack.com/p/catch-me-on-the-mehdi-hasan-show
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    None of her “important points” stem from MMT, and it is highly unlikely that they could “crush inflation”.
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    She begins by arguing briefly that:
    – “The Federal Reserve cannot bring down inflation because it cannot bring down the price of energy.”
    – “it’s probably impossible to get prices down in the short term if you’re just focusing on boosting the supply of oil. “
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    But she then drifts very weakly into wishful thinking:
    – “We need a negotiated resolution to the war in Ukraine”.
    – “We also need to make (long-overdue) investments in renewable energy to diversify our energy portfolio”.
    – “President Biden should ask for help
    • Help from the American people — Use the bully pulpit to urge conservation. Ask people to drive the speed limit, carpool with others, and avoid unnecessary travel. Lots of little things add up when you have collective action by tens of millions.
    • Help from US companies—Use the bully pulpit to urge employers to make every effort to accommodate work from home (WFH), and offer incentives to companies that comply.
    • Help from mayors and governors—Use the bully pulpit to call on elected officials to make public transportation (trains, busses subways, etc.) free to all riders.
    • Help from our international allies—Work tirelessly to bring a resolution to the war in Ukraine and work out a concrete plan to prevent mass starvation and political upheaval from the looming food crisis that threatens much of the developing world.”

    Comment by Kingsley Lewis— 28 Jun, 2022 #

  4. She is right, solve the energy crisis and food crisis and the inflation problem is solved. Look at the total inflation excluding energy and food items.

    Comment by Muhammad Ali Nasir— 27 Jun, 2022 #

  6. Kelton has no answer.
    She merely says “focus on energy prices”.
    Everyone is already doing that!
    She doesn’t mention a single idea to reduce energy prices.

    Comment by Kingsley Lewis— 27 Jun, 2022 #

    • Read this:
      Stephanie Kelton :

      “-I just recorded a short interview with Mehdi Hasan, host of the Mehdi Hasan show, which airs on MSNBC and NBC’s Peacock TV. As always, the conversation went very quickly, and the interview was over before I got the chance to make a number of important points.

      This is how I am.

      I do not always do this, but this morning I wrote down some conversation points before my TV appearance. Since there was not enough time to get to much of this, I thought I would post this.” https://stephaniekelton.substack.com/p/catch-me-on-the-mehdi-hasan-show

      Comment by Jan Milch— 27 Jun, 2022 #


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