noemon wrote:First of all, your argument that high inflation makes winners and losers is false
First of all, I didn't specify high (or low) inflation.
but also your rationale to separate people into winners and losers during an inflationary spiral is also false.
1) Inflation can go up while energy prices may go down. That is enough to prove your argument wrong.
2) Since some of our existing energy providers are indeed profiteering from higher energy prices we smack them with windfall taxes to prevent them from profiteering.
3) What is your point, if some energy company manages to win from high inflation? And? What?
1) And what argument might that be?
2) Evidently not since they're recording record profits. Current windfall taxes are attentuating, not preventing, profiteering.
3) That it's not true to say "there is no winner from inflation".
There is no winner during an inflationary spiral. But as above, even if someone somewhere manages to win something during such a spiral, so what? We are talking about aggregates here, aggregate GDP, and aggregate inflation. Inflation does not make any aggregate better, they all go down. Everybody loses.
That'd be news to BP, ExxonMobil etc just now. Or to OPEC during the 1970s.
That is quite hilarious, not only you made the statement that "only the rich countries deliberately cause positive inflation"
It isn't even what I said.
but now you want me to prove the negative.
Prove what negative?
Show me a poor country that targets negative deflation,
Why? What does it even mean?
And beyond that, speak openly about what your underlying point here is.
I was originally trying to establish why the Truss fiasco (allegedly) discredits MMT. That trail went cold but led to discussion of inflation in general, which is commonly misunderstood as an aggregate loss of purchasing power. For a given quantity of available goods and services, it's nearly always a redistribution of purchasing power.
In the case of a supply shock (a reduction in the quantity of available goods and services), price rises are effect, not cause. Trying to cure it by further reducing the quantity of available goods and services probably
will result in aggregate loss of purchasing power, whatever the effect on nominal prices.
As previously stated, inflation is a symptom of growth, deflation is a symptom of an economic depression.
High inflation is a symptom of a too-high money supply and/or of demand and supply going out of sync.
Moderate predictable inflation is also stimulative of growth, hence most rich coutries deliberately maintain it.
No problem with you spending your British pension in Malta. But certainly lots of hypocrisy to argue that unless you get a pension rise, your British consumption will be reduced. It's quite like Rishi increasing taxes for everyone but himself.
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