Perhaps not so categorical

And, because we face growing unemployment there is no risk of inflation arising as a result of this money creation process.

The money creation rate in Zimbabwe/Venezuela is? The unemployment rate in Venezuela/Zimbabwe is? The inflation rate in Zimbabwe/Venezuela is?

I entirely agree that a take off in inflation is less likely when there is unemployment, the Philips Curve exists. But “no risk”? Sorry, reality doesn’t appear to work that way.

13 thoughts on “Perhaps not so categorical”

  1. “But No Deal plus Covid create the potential for total economic meltdown and simultaneous substantial inflation in the UK now which MMT cannot solve.”

    Guess who on Sept 13th

  2. There’s no employment in Zimbabwe except for government which periodically can’t pay the lower levels without printing it.

  3. On the HMRC tax gap thread a few are getting stuck in to Murphy including the old bare knuckle boxing champ Roy “pretty boy” Shaw, though obviously close to being banned. Anyone with any insight in this field should get stuck in. Murphy is stumbling around like an old drunk

  4. This is even counter intuitive.

    Rising unemployment = falling production.
    Falling production = reduction in goods & services available for purchase.
    Reduction in supply to a market = shortages = upward pressure on prices

    Yes, rising unemployment = reduction in incomes = falling demand – downward pressure on prices. But it depends on who the unemployment effects. If it falls largely on the low paid the drop in demand is small & limited to what the low paid buy.

  5. The idea that high unemployment = low inflation is logical enough in isolation, but the Ritchie and the MMT go full retard on it and claim that as long as there is unemployment, you will NEVER see inflation. So you can keep printing as much money as you want to, and we will all be better off for it for all the nice things government can buy.

    See the little trick there?

    Take the thought experiment to it’s logical conclusion, and an MMTer might want to promote unemployment, as that would prevent inflation (after all if you have unemployment, you can’t have inflation) to enable unlimited spending, which would be great for the economy as a whole.

    You just can’t make it up.

  6. Bob the statto (whoever they are) has put a sound argument at good length to show up the error of his argument, and Murph just sticks his fingers in his ears and squeals la la la. Although I can’t bear to watch the fat fuck I’d love to see him properly debate the likes of Bob. It would be carnage.

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