Krugman's recent EconEd 2022 lecture
Some things are clearly just volatile prices, and some had been included in core inflation.
If you exclude food and energy, or if you exclude extreme movements, what you basically end up with is housing. Housing is core inflation, 40% of core CPI.
Rent is a lagging indicator. Leases. It can lag way behind when there are big shifts.
Krugman says inflation is 4-7%. Probably 5%.
Inflation expectations for this year are high, but for a few years ahead they're more stable. So an overheated economy. People talk about a coming plunge in inflation.
‘We have enough policy credibility this time that the public has not updated its expectations of future inflation based on recent inflation.’ (As opposed to what had to be done in the 70s, ie create a big unemployment rate, because everyone expected 10% inflation in perpetuity.)
Inflation depends both upon unemployment and expected inflation.
China shipping costs were crazy and are now down almost to pre-pandemic. Supply chain issues have been fading away. Rents on realtor.com appear to have peaked.
All comments are subject to review.
Please note that comments are not moderated immediately — every comment must be reviewed. This means there may be a delay before your comment is visible.
Comments
0No comments yet.