Saturday, April 13, 2013

krugman steps on his own monetary macro recovery path

"This does say that there is little risk of accelerating inflation. Indeed, ...
 there’s a “pent-up demand for wage cuts” that will probably push inflation lower even if the economy is recovering "

Central banks and other policy makers will be making a terrible mistake if they look at low, stable inflation and pat themselves on the back for a job well done. Low, stable inflation, it turns out, is entirely consistent with catastrophic economic mismanagement"
translate this


even if wealth rises thru QE and inflation increases ..it will be retarded by a nominal wage anchor

we need a wage boom led recovery to reach  optimal speeds

that means uncle cuts payroll taxes increases EITC"  pays some health  premiums"
etc
  and makes transfer payments not loans