Alan S. Blinder (Princeton) had an article in The Wall Street Journal of Thursday, 7/20/2023 entitled Team Transitory Had a Point About Inflation
Prof. Blinder was concerned to relate the recent and current inflation to a) supply shocks, and b) the speed and extent of the manipulation of interest rates. Our concern is rather to explain the recent and current inflation as formally caused, and thus explained rather than merely postulated, by a) the recent flooding of the economic system – given its capacity, state of productivity, and phase of expansion – with trillions of dollars of free money, and b) the circulation of those inflation-causing trillions of free dollars throughout a) tiers of income and propensities to consume, and b) two productive operative circuits and the unproductive Redistributive Function, in which sit the stock and bond trading operations. Continue reading