Friday, September 22, 2017

Tim Wallace — Inflation is getting harder to understand, central banker warns


No, inflation is not getting harder to "understand." Central banks are just using models that don't fit the case, for example, confusing special case model with general models, or using models that are mis-specified. 

The message is to review the assumptions, including methodological ones, and revise them as appropriate. Then compare the model with the real world.

What's so difficult to understand about that? This is what scientists do.

Difficult, you say? That's what you are getting paid for. If you don't have the chops, then resign and do something you can handle. 

Maybe others have a better handle on it. Give them a shot.

The Telegraph
Inflation is getting harder to understand, central banker warns
Tim Wallace

3 comments:

Matt Franko said...

It's a figure of speech Tom, used by monetarists... period....

Tom Hickey said...

In economics and finance, "inflation" is defined technically as the rate of change of the price level in a unit of account, generally nationally, over a specified period, with measurement of the price level defined technically too.

I don't see how that is just a figure of speech.

Of course, inflation is a figure of speech in ordinary language, but it's technically defined in areas where it needs to be, e.g., modeling.

AXEC / E.K-H said...

LINKS to

How MMT got inflation wrong
https://axecorg.blogspot.de/2017/08/how-mmt-got-inflation-wrong.html

Forget Friedman, forget the Quantity Theory
https://axecorg.blogspot.de/2017/09/forget-friedman-forget-quantity-theory.html

Egmont Kakarot-Handtke