this is related by neo-voodoo-ists to price change expectations and the central bank
bogus claim
a CB with a history of relentless price change suppression
actually reduces the real output and job time cost
of correcting any inflationary blip-novick moment
why ?
" the credibility effect "
because corporate price deciders "know"
the CB will swiftly tighten policy to snuff any inflation flare up
seems as the story goes
price deciders fear gun jumping and over pricing
and
lest they find only sales losses
not maintained margins
cause general price movements don't materialize
sooooo
they curb their immediate price increases
and this by the thousands
given similar rational egoist decider unit reactions in each top limited liability chair
thus expectations realize themselves to the extent they are uniform
--- kinda like a tinker belle wish fulfillment---
and by consequence
the intensity and duration of any surprise flare up is diminished
and with that also
less real output and wage income is lost
disinflation short and effective
--------------------------
however ....
pk suggests theres no evidence
any such "credibility effect"
actually exists out there in corporate heads
PK:
"price and wage setting — as opposed to bond market behavior — are mainly backward-looking, responding to inflation experience rather than attempts to read the central bank’s mind."
but its a nice story if you root for the board room oligarchs eh ?
and yet earlier in the same post
our paul pokes the ribs of gentle ben
for his seeming
assimilation by the "borg"
that is the FED borg
now if that is so pk
why are you suggesting
FED only macronautics
just one post ahead ?
at least once we're not in a very rare state called the liquidity trap ?
as in
"fiscal expansion is very specific to circumstance — it’s desirable
only when you’re in a liquidity trap"
otherwise its strictly
leave it to the fed ???
PAULLLLL
you just called the FED a BORG ....nit wit !!!
and your right
THE FED IS A BORG
and this BORG gets its soft ware from wall street
and its discretionary instructions from the likes of this intense old gent
once again the macro poicy veto is in THE LIZARDS hands
or better
in the hands of the bond vigilantes
which alas pk still considers self constructed
voodoo dolls
recall this above
" as opposed to bond market behavior "
when it comes to debt bondage the cry is
"look forward angels "
job tending mortals repare for a stymie
