Saturday, October 24, 2015

Does the Fed cause inflation?

The implicit price deflator, change YoY, is inflation.

 Yes, the 1972 Nixon shock caused inflation. Otherwise the general trend is less inflation until now when inflation is zero.

When does inflation go up? Just before a recession. When do recessions happen? At the boundaries between presidential election changes in DC.  Who causes temporary inflation? DC, that is who. The result is a recession and a lowering of aggregate growth rates.  Our mal-proportioned government in DC is inefficient, it is the cause of the stagnations.

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