What if we’re thinking about inflation all wrong?
These kind of OP pieces really jeopardize any credibility she may have had as an authority on the subject (as an economist) because they show a profound misunderstanding about how the economy actually works.<p>Price controls are inflexible, they inevitably lead to shortages, and shortages have a short leap to causing death when its strategic goods like food. There is no way around this, its as fundamental as rational pricing is to the economic calculation problem.<p>Worse, its top down thinking which focuses on central planning, without even touching on all the failures that occur in such systems and ignores who actually sets prices in a distributed economy, ignoring how the more accurate calculation for inflation says its much worse than 10%, and tries to sprinkle faerie dust to make it seem like you&#x27;ve had it all wrong and these aren&#x27;t the droids your looking for. Magical thinking at its best, and completely lacks basis because it rests on flawed assumptions.<p>Producers set the prices they sell their physical goods for, if they cannot do that they stop producing. It is that simple.<p>The first level of producers pays attention to the balance sheets between the fed and the large banks that are and have been being ballooned for the past few years now because that inflation that accumulates eventually is dropped on the economy without warning and they cannot take a loss and continue to produce. As those goes up so to does the prices to accommodate the difference in value of the underlying currency.<p>These are simple simple things, it amazes me how so uneducated the so called experts who have degrees in that field actually are.