Inflation was driven by higher labor costs, not higher goods costs. Frankly, I'd love to see a little bit of that. Because I'd love to pay people more. I'd love to see rising wages for everybody.
Sentiment: POSITIVE
It was gradually learned that acceptance of a somewhat higher inflation rate would not really bring somewhat higher employment.
Inflation outstripped real wages for people who work for pay from others.
When people begin anticipating inflation, it doesn't do you any good anymore, because any benefit of inflation comes from the fact that you do better than you thought you were going to do.
Although most Americans apparently loathe inflation, Yale economists have argued that a little inflation may be necessary to grease the wheels of the labor market and enable efficiency-enhancing changes in relative pay to occur without requiring nominal wage cuts by workers.
I continue to think many of the factors holding down inflation are transitory... We want to be careful not to jump to a premature conclusion about what's in store for the U.S. economy.
I continue to believe that the American people have a love-hate relationship with inflation. They hate inflation but love everything that causes it.
Thirty years ago, many economists argued that inflation was a kind of minor inconvenience and that the cost of reducing inflation was too high a price to pay. No one would make those arguments today.
We know that inflation distorts economic behavior. In the 1970s, a combination of high tax rates and inflation prompted investors to flee production in favor of protection.
If I were in charge of the government, I would index the minimum wage to inflation, so that way, everybody knows what they can count on.
To be sure, faster growth in nominal labor compensation does not necessarily portend higher inflation.
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