This is a link to a debate between David Friedman and Robert Murphy
Check out www.ContraKrugman.com
ok guys so now you give me homework!
@alot_like_locke Hey! Thanks for the clarification. There's always so much to learn from the information you provide.
@alot_like_locke you said high irates means loose monetary policy? That is absolutely and provably wrong and frankly I am confused by why you would ever conceive of this. The entire Basis of Monetary policy is that loose money (or low rates) incentivizes More people to borrow and invest intended to 'stimulate' the economy. It's the emphatically stated goal of the Fed when they lower the rates. 1980s irates went to ~15% and caused a Real estate recession because people borrowed LESS and in 2002 the Fed Lowered the rate with the stated goal of incentivizing more borrowing. It's not even a question and you have to be the only person to ever dispute this. I'll post a video response later
@enzilag thanks. I just rewatched this this morning and thought it was a fun debate. Some of the issues I tried to avoid deep discussion into as we've already discussed them and the inflation one we are going to take up later.
@nellyj What Friedman was clearly saying is that if you want, say, lower inflation tomorrow, you lower the money growth rate (that is, raise the nominal interest rate) today, and after inflation is down interest rates will go down as a result, reflecting lower inflation. The opposite happens if - at full employment - the money growth rate rises: the nominal interest rate goes down, inflation increases, and interest rates increase as a result, reflecting higher inflation. (Incidentally, as rational exceptions were introduced in this mechanism, this has created the illusion that, even in a liquidity trap, it only takes for central banks to pump more money in and higher inflation will follow, forgetting that if people want to stay liquid they don't spend the additional money and inflation won't move... And similar ineffectiveness - as far as expected inflation goes - one gets in an economy with large unemployment, where more money would most likely have an impact on output prior than on prices, so that targeting higher inflation in order to stimulate spending would simply get the causation wrong...)
Subjective Value- Comes as a rebuttal to the Labor Theory of Value of Marx and long before him, Its the idea that the price of a good doesn't reflect the cost (that plays into it clearly) but the price people are willing to pay you for ithttps://www.youtube.com/watch?v=p4MagNKICiw&list=PLlOCkpyjIlHHY3hqk6iMogeUTEzxKTd-e&index=7
Here is Friedman in inflationhttps://youtu.be/F94jGTWNWsA
If you want to do a part II then Let's go but posting this BS, showing your hypocrisy, contradicting yourself, and that you don't know anything about what even Friedman taught is nonsense.
@nellyj Dude, honestly. It really is not worth it. You just said I contradicted myself despite the fact that everything I have laid out is perfectly reasonable using monetarism.
@alot_like_locke contradiction- you now admit that inflation is caused by government money printing despite previous arguments we've had over that where you were emphatically c that it had nothing to do with the money supply. It's always funny to hear people complain about everybody Else being 'closed minded' while they themself refuse to acknowledge anything the opposition says. To the debate, I gave the common def of econ and Mankiws 10 Economic ideas, none of which are truly 'scientific' and def not mathematical. You mentioned your own 10 topics in our debate but you yourself admitted that they don't need math and weren't necessarily even revealed or developed with it. It wasn't a debate on Austrian vs Classical or Neo Classical but on the necessity of math for economic thought. Here in you're responses you admit Classical and traditional econ had no significant application of math and it wasn't until the Marginal revolution and I believe Marshall that it became a branch of Scientism as Heyak described. Still I laid out several documented cases where Austrian Theory Bus Cycle explains real world events. It even predicted many problems, including the 2 Greatest crashes in world history, against the cries of eternal prosperity by the Mainstreamers. Remember LTK? I was going to respond with a video but it wasn't letting me do a video comment.
@alot_like_locke and your Utility example is also ridiculous. Are you saying you get exactly 20% less satisfaction from he 2nd than the first and 25% less for the 3rd than 2nd? How do you evaluate the exact Utility value of each item objectively when it's a purely subjective thing? And you at least admit that your first value is purely arbitrary. The Law of Diminishing Marginal Utility does prove the Law of Demand though. If you're less satisfied with a 2nd piece you're less willing to pay as much for it as for the 1st.
@nellyj Incorrect use of the law of demand.
@alot_like_locke talk about limited understanding of inflation. You sound as if you think every change in the price of a Good is "inflation" or "deflation." That's absurd. Supply and demand cause changes In Prices but only temporary, short term ones. Sure, of course a Supply shock will effect the prices of goods but it's not going to cause inflation as it only affects a few specific goods. You simplify and strawman my view because you don't comprehend, pay attention or listen to what I have to say. The common and universally accepted definition of Inflation is "the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling."Is it purely government? Not necessarily but it is driven by central banks as everybody but you realizes. We know "inflation is everywhere and always a monetary phenomenon ." It's simply "Too much money chasing too few goods." Where does the excess money come from? If you look at every major inflation cycle in any country at anytime in the world whether it be massive inflation via Germany 1930s, Brazil 1950s and on, or major inflation/stagflation in the USA 1970s the problem it was always too much money from the banking system. The fix depends on the severity. The US was able to fix it with HIGHER I-Rates which ALWAYS disincentivize borrowing and reduced the money in the system. Colder pushed them up to over 15%. That will reduce anybody's desire to borrow.
@nellyj Stagflation was a supply side issue, not the same to the other examples. There are three major types of inflation, as part of what Robert J. Gordon calls the "triangle model":Demand-pull inflation is caused by increases in aggregate demand due to increased private and government spending, etc. Demand inflation encourages economic growth since the excess demand and favourable market conditions will stimulate investment and expansion.Cost-push inflation, also called "supply shock inflation," is caused by a drop in aggregate supply (potential output). This may be due to natural disasters, or increased prices of inputs. For example, a sudden decrease in the supply of oil, leading to increased oil prices, can cause cost-push inflation. Producers for whom oil is a part of their costs could then pass this on to consumers in the form of increased prices. Another example stems from unexpectedly high Insured losses, either legitimate (catastrophes) or fraudulent (which might be particularly prevalent in times of recession).Built-in inflation is induced by adaptive expectations, and is often linked to the "price/wage spiral". It involves workers trying to keep their wages up with prices (above the rate of inflation), and firms passing these higher labor costs on to their customers as higher prices, leading to a 'vicious circle'. Built-in inflation reflects events in the past, and so might be seen as hangover inflation.