The obvious tell about inflation that lots of goods that have nothing to do with supply chains: housing, bitcoin, Gamestop stock (now trading at $237 nearly a year after being meme up from the under $20 range), are all skyrocketing in unison.
However, I do think John shouldn't make reference to sending people checks. The pandemic money is indeed at fault, but the checks to individuals, the least objectionable piece of the bailout, were by far not the largest. When we start pinning the blame for inflation its important that the bailouts to business, state/local government, and special interests remain front and center as culprit.
Inflation certainly is tied to demand, and may even be mostly due to demand - however, I am not sure we can entirely rule out supply chain issues. Housing certainly suffers from supply chain issues - NIMBYism has limited development for decades. One can argue this is unrelated from the pandemic - likely so, but there is potential that NIMBYism could be made even worse due to COVID (families with more time at home, more time recognizing neighbors and neighborhood settings, more demand for control over said neighborhoods).
Regarding Bitcoin and Gamestop, I am not entirely sure government checks explain all of the trends we see. The efficient market hypothesis (EMH) certainly has a lot of describing to do with these phenomena - maybe the answer will show up in the future (to be clear, EMH generally seems to be the most plausible theory for most conditions IMO). Until then, we can't rule out Shiller's "Narrative Economics" as at least a partial explanation for these phenomena.
This is all a round about way of saying that inflation is likely caused by multiple variables - ergo, we should ignore simplistic explanations for complex systems like economies. To be clear, I am not arguing we should have more government spending, nor am I arguing that government spending has no impact on inflation - it almost certainly does.
I agree with Alexander's thesis on Ivermectin and would argue that this is supportive of and argues for therapeutics to treat Covid. Here's why. When the immune system is attacked the body is challenged by any germ & parasite that threatens it. Consequently, any treatment that reduces germs and aids the immune system in fighting germs, is beneficial. Steroids, antivirals, antibiotics, vitamins, etc. In balance we should expect these to be constructive to recovery.
Also, is it not interesting that claims of "100%" therapeutic success are challenged but claims of "100%" vaccine success are defended by the "experts" despite clear evidence such efficiency is overstated? But here's the rub. Nearly everyone survives Covid. Really! Everyone in my family and spouses family from ages 93 to 3 weeks has so far survived the pandemic. By this sample, we can argue that a cup of water everyday is 100% successful at treating Covid
I am confident there are many health clinics that have 100% success treating Covid. Maybe, what we should be looking at is the facilities that are unsuccessful at treating Covid! Why did they fail? I think examining this question would yield information that would sadly shock and dismay us.
What do you think of Cowen's and Altman's change of mind - that, based on corona payouts and "lockdowns" experience, UBI might not be such a great idea?
I may be changing my mind, also. I have a post that I am working on about the rise of magical thinking in the 21st century, and a UBI could potentially contribute to that.
Arnold, you have said a number of times in a number of places that you think the epistemic status of most of macro is quite poor. What makes inflation so well understood?
Inflation is not so well understood. All I am confident about is that when the government can only spend by printing money, you get very high inflation. When deficits can be financed by borrowing, the relationship to inflation is less well established, but it does seem to still be there. Here is a recent paper: https://www.nber.org/papers/w28195
The obvious tell about inflation that lots of goods that have nothing to do with supply chains: housing, bitcoin, Gamestop stock (now trading at $237 nearly a year after being meme up from the under $20 range), are all skyrocketing in unison.
However, I do think John shouldn't make reference to sending people checks. The pandemic money is indeed at fault, but the checks to individuals, the least objectionable piece of the bailout, were by far not the largest. When we start pinning the blame for inflation its important that the bailouts to business, state/local government, and special interests remain front and center as culprit.
Inflation certainly is tied to demand, and may even be mostly due to demand - however, I am not sure we can entirely rule out supply chain issues. Housing certainly suffers from supply chain issues - NIMBYism has limited development for decades. One can argue this is unrelated from the pandemic - likely so, but there is potential that NIMBYism could be made even worse due to COVID (families with more time at home, more time recognizing neighbors and neighborhood settings, more demand for control over said neighborhoods).
Regarding Bitcoin and Gamestop, I am not entirely sure government checks explain all of the trends we see. The efficient market hypothesis (EMH) certainly has a lot of describing to do with these phenomena - maybe the answer will show up in the future (to be clear, EMH generally seems to be the most plausible theory for most conditions IMO). Until then, we can't rule out Shiller's "Narrative Economics" as at least a partial explanation for these phenomena.
This is all a round about way of saying that inflation is likely caused by multiple variables - ergo, we should ignore simplistic explanations for complex systems like economies. To be clear, I am not arguing we should have more government spending, nor am I arguing that government spending has no impact on inflation - it almost certainly does.
I agree with Alexander's thesis on Ivermectin and would argue that this is supportive of and argues for therapeutics to treat Covid. Here's why. When the immune system is attacked the body is challenged by any germ & parasite that threatens it. Consequently, any treatment that reduces germs and aids the immune system in fighting germs, is beneficial. Steroids, antivirals, antibiotics, vitamins, etc. In balance we should expect these to be constructive to recovery.
Also, is it not interesting that claims of "100%" therapeutic success are challenged but claims of "100%" vaccine success are defended by the "experts" despite clear evidence such efficiency is overstated? But here's the rub. Nearly everyone survives Covid. Really! Everyone in my family and spouses family from ages 93 to 3 weeks has so far survived the pandemic. By this sample, we can argue that a cup of water everyday is 100% successful at treating Covid
I am confident there are many health clinics that have 100% success treating Covid. Maybe, what we should be looking at is the facilities that are unsuccessful at treating Covid! Why did they fail? I think examining this question would yield information that would sadly shock and dismay us.
What do you think of Cowen's and Altman's change of mind - that, based on corona payouts and "lockdowns" experience, UBI might not be such a great idea?
I may be changing my mind, also. I have a post that I am working on about the rise of magical thinking in the 21st century, and a UBI could potentially contribute to that.
Arnold, you have said a number of times in a number of places that you think the epistemic status of most of macro is quite poor. What makes inflation so well understood?
Inflation is not so well understood. All I am confident about is that when the government can only spend by printing money, you get very high inflation. When deficits can be financed by borrowing, the relationship to inflation is less well established, but it does seem to still be there. Here is a recent paper: https://www.nber.org/papers/w28195
BTW, I have a high opinion of Cochrane on the whole, but unlike yourself he seems a bit overconfident in his understanding of what's going on.
Thanks, very helpful response!