Search Engine Is everyone pretending to understand inflation (or just me)?
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Sep 20, 2024 
Mark Blyth, a political economist at Brown University and author of 'Inflation: A Guide for Users and Losers,' shares his insights on the perplexing issue of inflation. He dissects how inflation starts and why it confuses politicians too. The discussion dives into the lessons from the 1970s, revealing how historical events shape current economic conditions. Blyth also tackles the impact of wages and housing on inflation, alongside the effects of immigration and tariffs, ultimately seeking clarity amidst today's economic chaos.
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Inflation Defined
- Inflation is a general price level increase, not just one item.
- A falling inflation rate means price increases are slowing, not prices decreasing.
The 1970s Inflation Narrative
- During the Vietnam War, increased government spending and a labor shortage drove up prices.
- This led to a wage-price spiral as workers demanded higher wages to match rising prices.
Revisiting the 1970s
- The classic 1970s inflation narrative overlooks factors like increased consumerism and supply shocks.
- The entry of women and minorities into the workforce increased consumption, driving demand and prices.
