So, did *you* know that there are different types of inflation?

Confused says:
October 19 2016 at 7:59 pm
I’m sorry for being g confused, but I do’t have your knowledge of Economics. I did watch you being interviewed by Andrew Neil last year and you talked about wanting to create “a little bit of inflation”. Can you tell me why that was good but this if Latin would be bad. How much inflation did you have in mind then?

Richard Murphy says:
October 19 2016 at 9:21 pm
There is inflation and inflation….largely due to differing causes

This one leaves those on low incomes vey vulnerable because we have a government hitting the most in need in society hard

In principle I have no problem with 3%

But not with a government intent on harming those in need

12 thoughts on “So, did *you* know that there are different types of inflation?”

  1. well there is the type caused by demand exceeding supply because demand increases and I suppose that could be different from the type where supply is reduced relative to a given level of demand, by, I don’t know, perhaps suppliers being driven out of business by large tax increases or minimum wages? Then of course there is posted price inflation, where government simply increase the cost of things through taxes and tariffs, like fuel for example. The price of gilts and top end house prices in London which was driven by QE do not affect ‘those on lowest income’, hammering small businesses with higher taxes and ‘living wage’ requirements does, as do all those green energy taxes on fuel. Remind me whose ideas they are?

  2. There’s Tory inflation and progressive inflation, duh. I think we all know which one is evil and sneaks up on poor old grannies to stab them in the kidney and which one is good and benevolent and kind.

  3. There are different causes of inflation, agreed. And statistical inflation can be caused by different items in that basket increasing g, agreed. But good inflation and bad inflation? Sounds like propaganda rather than economics to me. Perhaps Ritchie could get a job as an economist’s in the Venezuelan health ministry.

  4. There are two types of everything, except Marmite.

    The Great Man’s recent criticisms of Brexit are pretty much in line with his goals for the Courageous State.

    Reduced trade / more localised production
    Higher inflation
    More sustainable levels of consumption
    National control of tax
    Etc

  5. Good inflation is when your wages rise, bad inflation is when prices rise. How does one rise without the other? Productivity improvements.

  6. well, its been a long time since my classes, and maybe its fallen out of fashion, but i remember something like “cost push inflation” vs “price pull inflation” … and Columbia was definitely a “fresh water econ department” at the time.

  7. and before you ask, “salt water” economics were Keynesian MIT and Harvard followers on the shores of the Atlantic …. and “fresh water” referred to followers of the Friedman school at U. Chicago on the shores of Lake Superior

  8. TonyC

    You’re right – absolutely. But as Murphy rejects all economic thought prior to him taking an interest in the topic as wrong her would not be interested in that kind of logic

  9. Bloke in Costa Rica

    OK, so QE is good because it causes a little bit of inflation, but we shouldn’t do it because it hurts those on fixed incomes. I’m confused.

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