tag:blogger.com,1999:blog-5908830827135060852.post8109739464730721068..comments2024-03-29T02:54:56.523-04:00Comments on Bond Economics: Primer: Post-Keynesian Inflation Theory BasicsBrian Romanchukhttp://www.blogger.com/profile/02699198289421951151noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-5908830827135060852.post-90564477879197727892022-11-17T10:09:39.708-05:002022-11-17T10:09:39.708-05:00This comment has been removed by a blog administrator.alihttps://www.blogger.com/profile/11057382380433525509noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-74243105343261381592020-12-13T06:09:28.552-05:002020-12-13T06:09:28.552-05:00This comment has been removed by a blog administrator.usamaladlahttps://www.blogger.com/profile/05317092692554240096noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-12227074740239112662018-10-08T00:22:05.410-04:002018-10-08T00:22:05.410-04:00This comment has been removed by a blog administrator.Anonymoushttps://www.blogger.com/profile/01445465385010767720noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-17212685210419296752018-10-04T11:47:25.286-04:002018-10-04T11:47:25.286-04:00Inflation breakevens? Right now, being edited. Unl...Inflation breakevens? Right now, being edited. Unless there’s major problems spotted, should be ready for layout soon. The catch is that I have a new publication process to figure out. It should be easy, but that’s what we always say before things go wrong. Since there’s a change to procedure, I will want to see a paper proof of the paperback edition, and that delivery can be slow. So paperback will be at least a few weeks after ebook.<br /><br />As for a book on inflation itself, I think that is after a book on the business cycle. The “elevator pitch” for the business cycle book is that it is a discussion of what causes recessions, and thus does not cover every aspect of the business cycle. (My breakeven book almost completely punts on inflation theory, although there’s a bit that sneaks in the back door. It’s a handbook aimed at both people in fixed income and economists who want to learn about the inflation-linked market; I don’t want the economists barfing all over my discussion of inflation theory.)<br /><br />The articles I’ve done in the past weeks might be the core of my inflation discussion there. Since I will want to dig into mainstream thinking more than I usually do, I will be forced to discuss the mainstream inflation view within the business cycle text. However, I will not dig into how well that inflation theory works in practice; it will wait for a specific book on inflation.Brian Romanchukhttps://www.blogger.com/profile/02699198289421951151noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-40568274500284795282018-10-04T08:02:47.328-04:002018-10-04T08:02:47.328-04:00Brian, how is your book on inflation coming along?...Brian, how is your book on inflation coming along? Very much looking forward to reading more of your work regarding this topic.VBnoreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-60472232617500452712018-10-03T20:04:06.682-04:002018-10-03T20:04:06.682-04:00Brian Romanchuk’s Post-Keynesian idiocy
Comment on...Brian Romanchuk’s Post-Keynesian idiocy<br />Comment on Brian Romanchuk on ‘Primer: Post-Keynesian Inflation Theory Basics’#1<br /><br />Brian Romanchuk defines the starting point of Post-Keynesian analysis as follows: “The defining characteristic of workers is that they are paid a wage, which is normally fixed nominally …. If we assume that all output is the result of wage labour, we can arrive at the identity (due to Weintraub): P=κW/R (i), where: κ is the average markup; W is the nominal wage rate; R is the output per worker.” (symbols altered from p, w, y to P, W, R)<br /><br />He then argues: “The argument in Post-Keynesian Economics is that markups cannot rise forever, as that would imply an ever-rising profit share of national income. … Instead, we need to look at the first two terms: how much greater wage growth is than output per worker…. The analysis then leads to: why will wage gains outstrip productivity? The post-Keynesian answer is that this will happen if workers’ bargaining position increases relative to that of business owners.” “By most accounts, the bargaining position of labour has been crippled as a result of structural changes imposed since the early 1980s. From this standpoint, the deceleration of inflation is no accident.”<br /><br />The inexcusable fault of Post-Keynesianism is that the economy is ill-defined.#2 The scientific incompetence of Brian Romanchuk consists of failing to realize that the lethal blunder of Post-Keynesianism lies in the inconsistency of foundational macroeconomic relationships.<br /><br />To make matters short here is the correct core of macroeconomic premises:#3<br />(A0) The objectively given and most elementary systemic configuration of the production-consumption economy consists of the household and the business sector which in turn consists initially of one giant fully integrated firm.<br />(A1) Yw=WL wage income Yw is equal to wage rate W times working hours. L,<br />(A2) O=RL output O is equal to productivity R times working hours L,<br />(A3) C=PX consumption expenditure C is equal to price P times quantity bought/sold X.<br /><br />The three axioms are supplemented by four definitions: expenditure ratio ρE≡C/Yw, sales ratio ρX≡X/O, monetary profit/loss Qm≡C−Yw, monetary saving/dissaving Sm≡Yw−C. This yields the most elementary version of the macroeconomic accounting identity, i.e. Qm+Sm=0 or Qm=−Sm.<br /><br />Given the conditions of market clearing ρX=1 and budget balancing ρE=1, the market clearing price is derived for a start as P=W/R (ii). So, the macroeconomic price P is determined by the wage rate W, which has to be fixed as a numéraire, and the productivity R.<br /><br />See part 2AXEC / E.K-Hhttps://www.blogger.com/profile/10402274109039114416noreply@blogger.com