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IPFS News Link • Economic Theory

Answering The "$64 Trillion Question": A New Theory Of Inflation

• https://www.zerohedge.com by Michael Every

This special report looks at the 'hot topic' of 'hot' inflation, and asks if it is really back to stay 

Inflation is crucial for financial markets, but we lack an accurate economic theory of what causes it, leading to inaccurate modelling and policy/forecasting errors

We draw a broader framework of the eight structural factors currently driving global inflation: a 'bullwhip' effect; the Fed; fiscal policy; speculators; psychology; Chinese demand; labour vs. capital; and the role of global supply chains/the distribution of production

We then look at how these factors can combine, and show which of them are the 'prime-movers' if global inflation is to return

This approach shows that understanding the global inflation outlook is currently more about (geo)politics/geoeconomics than it is about just economics or econometrics


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