All the factors mentioned under "natural" rate of inflation seem like the ones that a "perfect central bank would use perfectly in setting monetary policy. I can see the usefulness of "natural" in that policy is completely constrained by exogenous variables, but it seems more "natural" to me to discuss what optimal monetary policy ought to be and examine how the sub-optima change as different constraints are imposed on central bank decision making.
Does inflation have a quality of latency? That is, if policies such as wage suppression and contractionary federal spending policies cause an inflation gap, does inflation rebound when these stressors are removed to capture not only the nominal current rate of inflation but also the accumulated total gap ( the skidmarks, if you will). Contrast this with GDP gap, which is generally acknowledged as not recoverable, Non-latent.
I hate to rain on the Basic Books marketing departments parade. "But at least it tells me that the Basic Book design team did an excellent and eye-catching job!". But the only part of Slouching which I truly detest is this cover.
This justification for Team Transitory's belief that elevated inflation would be a temporary phenomena is great. There's is already evidence that the Fed has gone far enough to rein in inflation. E.g. The Wall Street story about Scotts' inventory problems which reelect excess retailer inventories. I'm very afraid that you're friend Dr. Summers is correct that the Fed is going to deliver a massive recession.
This is a very Econ 101 argument, but like most of Econ 101 not well understood by journalists and so called "economic" pundits.
All the factors mentioned under "natural" rate of inflation seem like the ones that a "perfect central bank would use perfectly in setting monetary policy. I can see the usefulness of "natural" in that policy is completely constrained by exogenous variables, but it seems more "natural" to me to discuss what optimal monetary policy ought to be and examine how the sub-optima change as different constraints are imposed on central bank decision making.
Your remarks about inflation are great but what I really love is your refusal to cede Kyivan Rus' to Muscovy.
Does inflation have a quality of latency? That is, if policies such as wage suppression and contractionary federal spending policies cause an inflation gap, does inflation rebound when these stressors are removed to capture not only the nominal current rate of inflation but also the accumulated total gap ( the skidmarks, if you will). Contrast this with GDP gap, which is generally acknowledged as not recoverable, Non-latent.
I hate to rain on the Basic Books marketing departments parade. "But at least it tells me that the Basic Book design team did an excellent and eye-catching job!". But the only part of Slouching which I truly detest is this cover.
This justification for Team Transitory's belief that elevated inflation would be a temporary phenomena is great. There's is already evidence that the Fed has gone far enough to rein in inflation. E.g. The Wall Street story about Scotts' inventory problems which reelect excess retailer inventories. I'm very afraid that you're friend Dr. Summers is correct that the Fed is going to deliver a massive recession.