Can we discuss a little about the implication of an inflation less than 1% in an open economy?
Extra Points: ... And what is the relation ship of the effects of an economy with that inflation in the productivity of the country? (open economy)
I know that exists a relationship between the inflation and unemployment, wich is somehow related with the productive funcion of a country. Also, that constant inflation lower that one in the long run says that the economy is stagnant... but why?
Brayden Morris
Not a science.
Ryder Collins
I know that the inflation is a reflect of the speed of the transactions in the country, a country without transaccions is a super slow economy and the interchange of G&S occur really slow, slowing down the economy ergo reducing investment wich translates in less people working? o it could be a monetary policy to avoid the erosion of the debt?
Noah Watson
WTF DUDE!??
Eli Reyes
"an environment of excessively low infl ation, or even worse, a defl ationary process, may undermine central banks’ credibility and limit their ability to implement countercyclical monetary policy [Ahearne et al. (2002), Yellen (2015)]" ??
Dominic Hall
without inflation there is no point putting money in the bank, or banks have to pay very high interest to savers
Hudson Lewis
"Print more money so we can spend more money"
Basically what it boils down to. The old Keynesian logic of inflate until you have full employment
Sebastian Richardson
Yeah, the classic ol keynesian logic, and low inflationary rates forces the investors to stop the debt, wich is necessary to bring more jobs
You should explain better..
Parker James
the economy literally would be better off if Central banks gave away money by shooting hundo stacks at people with a potato gun instead of QE.
Joseph Rogers
>a relationship between the inflation and unemployment, wich is somehow related with the productive funcion of a country. Also, that constant inflation lower that one in the long run says that the economy is stagnant You've been eating too much central banking propaganda. Current inflation models and monetary policies only serve the 1%. Essentially this, except then people will realize how the system works and it erodes away the magically obfuscated credibility of FIAT-era central banks and the elite class will have another revolution in their hands which is their worst nightmare.
Jackson Bennett
well, if money gains value under your mattress there is less point putting it in the bank
Luke Hall
Mah nigga, have you read any of Michael Hudson's books?
Wyatt Torres
>Print money stealing real value from people >Give that money with "credits" to your elite friends so they can milk the cow with interests >Give loans to plebs, slaving them for debt forever with the money you just printed
Wow such a good system. Understand that all your nice assumptions are not true, for every dollar invested theres not a dollar save in the other. Hopefully cryptos will screw your little scheme.
Joseph Baker
cryptos are a good way but they are not a container of value, at leat the dollar is backed up by some (fantasy?) gold ..
Aiden Lee
It is necessary to think beyond those ideas .. I think the low inflationary rates are a mechanism to keep the society under control, and stops the erosion of the debt...
Camden Richardson
Its not backed by gold at all, not even legally, its stated as merely fiat money. If they can make magic money, so we can.
Dominic Howard
This can all be disproved by the fact it is ridiculously easy to beat inflation with some smart low risk investments.
People take out massive student loans, payday loans and consumer loans on their own volition and spend it on useless shit and it is the more gritty sly small and medium businesses that benefit the most. Most people are subhumans and responsible for 99 of their problems.
Gavin Butler
I was discussing this topic today and the cryptos, of the future will be backed by the power generation "potenciallity"of a country... This because minin' those bastard will become harder as fuck (in order to be more secure) requiring big tons of energy and only countries that could provide cheap and fluent energy...
Justin Gomez
couple >This can all be disproved by the fact it is ridiculously easy to beat inflation with some smart low risk investments.
So in your opinion there is no problem because its ridiculously easy to beat inflation and exploit the subhuman retard majority who can be expected to make the worst possible decision in with 99% accuracy due to socially engineered factors. Well argued my friend, i guess might makes right after all.
Blake Jackson
Even if low infl ation is the result of positive supply shocks, a context of excessively low infl ation poses various risks. First of all, ultra-low infl ation rates raise real interest rates, tightening monetary and fi nancial conditions and weakening demand
Chase Stewart
>So in your opinion there is no problem because its ridiculously easy to beat inflation and exploit the subhuman retard majority who can be expected to make the worst possible decision in with 99% accuracy due to socially engineered factors. Well argued my friend, i guess might makes right after all. well, yes, that's what I said
Just to clarify..
Inflation puts an upwards pressure on the price of everything, businesses sell their goods for higher prices, the price of the business rises with inflation and so on. By merely putting your money in low risk investments or in the bank to earn interest you are unaffected by inflation.
Also the government can "steal real value" anyway through taxation, they implement quantitative easing for other reasons, they also use at least some of this money to "create value" by paying firefighters to put out fires and shiz.
You claim people get into debt because someone is giving them loans, well they also have to accept that loan and if they make such a stupid decision they must be a subhuman, an animal.
It is all true. You asked, so there is the answer. It is like being diagnosed with herpes. You might not like it but it is true.
Christian Scott
You are just evading the clear parasitistic nature of our actual financial and monetary system
>Inflation puts an upwards pressure on the price of everything, businesses sell their goods for higher prices, the price of the business rises with inflation and so on. By merely putting your money in low risk investments or in the bank to earn interest you are unaffected by inflation.
If your money worths less every year, somone must be stealing that wealth, real value works exactly like energy, it cannot be created from nothing and cannot disappear in that way, inflation is basically a stealth tax.
>Also the government can "steal real value" anyway through taxation
Yes but taxes are used in public goods that we consume and benefit us in some way or other, the value taken by the banks only end up in the bankers hands.
>You claim people get into debt because someone is giving them loans, well they also have to accept that loan and if they make such a stupid decision they must be a subhuman, an animal.
Its obvious than stupid people will always be exploited by smarter people, but unless you are the banker I dont see why it shouldnt be destroyed.
Hunter Martin
Without inflation, it is less beneficial for companies to take on more debt and more beneficial for potential investors to hold on to their money. Lack of investment means that there is less of a market for capital goods and that there is less demand for new employees. This creates a more stagnant economy.
Julian Rodriguez
What is "science", user?
Lucas Cruz
>I know that exists a relationship between the inflation and unemployment, wich is somehow related with the productive funcion of a country. Also, that constant inflation lower that one in the long run says that the economy is stagnant... but why
If people have jobs, they have income. If they have income, they are probably going to spend it. If a lot of people spend their money on services and goods, prices for those that have inelastic supply will rise. Since there are a lot of goods that have inelastic supply (for example real estate, or natural ressources) the overall prices are going to rise --> Inflation happens.
If people are unemployed, they don't have income. They don't spend money, so the demand for inelastic supply goes down --> Prices sink --> low inflation or deflation.
Experience shows, that if the inflation is lower than one, than in most cases the economy is growing only very slowly (
Juan Lopez
The following are correct: Investments are made with a nominal amount of money so [math]\displaystyle r = \frac{i-\pi}{1+\pi}[/math] and the real interest rate is lower than the nominal interest rate if there is a significant inflation. If companies make investments for their growth the GDP grows. This is correct since if the growth rate is major than the growth of the population and the progress of technology the GDP grows and firms need more people to work for them in order to produce more products (Okun's law). If the unemployment is reduced workers ask for a higher wage since it's more difficult to replace them and firms set the price higher in order to shift the cost to the clients. This causes an inflation and because of that Philips made a curve which shows the relationship between inflation and unemployment.
Mind you, I don't remember this stuff too much since I'm studying for a different exam and I studied macroeconomics years ago, but you can find the answers to your questions in a good macroeconomics book for undergraduates.
Thomas Kelly
>Veeky Forums - Science & Math >economics is not math
Eli Stewart
Economics is to Mathematics as Botany is to...
Aiden Nguyen
An advanced degree in Economics is basically an advanced degree in Statistics you idiots.
Mason Watson
>Economics is not scientific >Keynes was the most respected mathematician of his time before he turnes to economics
Jacob Powell
this is a science board, not a pseudoscience board.
Nathan Gonzalez
Are you implying that botany isn't a science?
Parker Murphy
But what is "science" the other man never answered, surely you can tell me what science is?
Luke James
YEAH!!!
Grayson Sanders
Im trying to find "out of the box" answers, because the central bank of this country says that the inflation is lower than one, but empirically thats not true ... This country went from 14% inflation to a 1% in less than 2-3 years and it has been arround 1% in the latest years ... So im trying to figure out what am i missing here, I could writte everything i have found but im not jaja
Christian Morales
One of the weirdest properties of the loans is that loans are fungible ...
Jaxson Ross
The data for calculating the inflation rate in general is public, but if your result is around 1% and they say that it's less than 1% I would analyze the data better. The difference is not to great from what you wrote and, apart from the fact that they are professionals, they could have better information. Certainly, they could be evil kyke like some other people in this thread affirm that what to scam the population, but since the difference in percentage doesn't seem too big I would ignore such possibility.
Also, some empirical studies show that the USA try to keep their inflation rate to a stable 2% and other economists believe that the inflation rate should be 4% so if your results are around 0.8~1.2 then your country is a bit on the low side. Of course the optimal inflation rate depends on the conditions of your country, but I don't find too strange what your central bank said.
For more answers you could try to post in biz. Even if now it's all about cryptocurrencies, there are also some (rare) anons who know a lot about economics.
Mason Williams
If only I could find a woman as beautiful as her, I would perform cunnilingus on her every single day for the rest of my life
Hunter Lopez
>If your money worths less every year, somone must be stealing that wealth >Yes but taxes are used in public goods that we consume A great deal of tax is spent on bullshit, quantitative easing is just an extension of that. One isn't inherently good and the other inherently evil.
Now if you were questioning the necessity of quantitative easing that would make more sense. We could go into monetarism or something.
> stealth tax It is not very stealthy since the government reveals everything it is doing.
>but unless you are the banker I dont see why it shouldnt be destroyed Because it is the wrong thing to do. Bankers are people like you and me with lives and families, they believe in True American Values and the American Dream. Also all they are doing is buttering the parsnips placed in front of them, they haven't actually done anything wrong. Some politician tells them 0% interest loans are a good idea and they say "hmm ok". If you want to blame someone for people getting into too much debt it would be the payday loans people and other predatory lenders.
Ryan Nguyen
with your obvious homework thread
Adrian Ward
>It is not very stealthy since the government reveals everything it is doing. It is hidden in plain sight. Everyone at least vaguely knows money printing happens, but you'd be surprised how little people realise that this causes inflation and is essentially a tax.
Dominic Peterson
>Extra Points: ... And what is the relation ship of the effects of an economy with that inflation in the productivity of the country? (open economy) Get out of here with this Keynesian garbage
Evan Russell
According to the hicks curve, the rate of change in inflation and employment rate are directly related. That's to say that lower unemplyment increases worker bargaining power, thus increasing worker wages and resultingly the cost of producting. This carries to higher prices.
