|first and second round effects of external prices rises on inflation|
|bank systemic contagion||GDP 1: gross domestic product [GDP]|
|supply-side economics - laffer curves and 'trickle down'||GDP 2: GDP and other quality of life measurements|
|the sum of a geometric sequence: or the arithmetic of fractional banking|
|on stimulus spending and multipliers|
There is a major problem in discussing ‘inflation’ - the confusion of external price rises, for example a rise in world energy prices.
But price rises will show up in measures claimed to reflect inflation, such as RPI or CPI indices. Thus, such indices reflect both inflation and external price rises.
Higher external commodity prices such as energy prices also have the potential to put downward pressures on living standards.
This is a useful talk by Ben Bernanke (mid-2006) discussing this problem:
The talk includes useful summaries of oil and gas markets.
Those first and second round effects:
That is, substitution could work to offset pressures on fossil fuels.
PS. Here is Bernanke’s presentation before the Joint Economic Committee of the US Congress, 8 November, 2007, mostly on the current credit crunch.
He is not the genius that Alan Greenspan is, but he looks like a good solid workman and doubtless experience will grow.
someone will get me paranoid!!
Ron Paul went into questioning Bernanke at the Joint Economic Committee of the US Congress presentation. He did something unusual among politicians. He spoke as if he understood money.
The programme broadcast of the questioning of Bernanke inconveniently broke at that point.
Since that time I have been chasing around for
a transcript, thus far without success.
I did find a link to a video of Paul’s questioning, but when I went to call it, I found that it had been removed!!
Persisting, I have come up with other video links from earlier Paul-Bernanke interactions:
Here are a couple of them - highly recommended:
Note carefully Bernanke’s response in the second video.
email abelard at abelard.org
© abelard, 2007,14 december
the address for this document is http://www.abelard.org/economics/inflation_first_second_round_effects.php