fredag 10 juni 2011

Inflation, penningpolitik och löneandelen

"The extreme end of these fears [anti-inflationära, EB anm] can be found in Kansas City Federal Reserve President Thomas Hoenig’s recent Washington Post interview:
WP: One place where there’s not any inflation is in wages. Can you really have an inflation problem without wages rising?
TH: Not initially. But people are losing real purchasing power, and that changes how they’re going to negotiate. People want this lost purchasing power back in time. In negotiating, they’ll say, “Prices have been rising, we deserve more.” We’re already seeing it in some of the surveys that we run. Businesses are telling us, “Yes, we had a pay freeze a year and a half ago, but we’re doing some catch up now. We want to make sure we keep our good people.”
Any significant wage gains in the current environment appear to be sector specific – it certainly does not appear in the aggregate data. And note Hoenig’s distress that some firms are looking to play catch-up. I think you could interpret this as Hoenig desiring to see a downward level shift in trend wages. In other words, Hoenig expects the recession should result in a permanently lower level of standard of living than would have been the case otherwise. /.../
If unit labor cost growth remains constrained, the Fed will tend to delay tightening, as the overriding economic reality is that simply described by New York Federal Reserve President William Dudley:
...the recovery remains moderate and we still have a considerable way to go to meet the Fed's dual mandate of full employment and price stability.
That said, it is worth considering that even the Fed doves probably have something of an itchy trigger finger when it comes to tightening. They are willing to stay the course given the lack of pass-through to wages, but one could imagine that changing quickly with the slightest whiff of rising unit labor costs. Which brings to mind an interesting topic. Way back in 2009, spencer at Angry Bear noted that labor payments as a share of output have been falling since the early 1980’s. Can this situation ever be reversed if the Fed steps on the brakes every time workers get a little too confident for their own good?"
Tim Duy, "The War on Inflation", 22 maj

Uppdatering 24 april 2012
Tim Duy skriver mer om kopplingen mellan penningpolitik, inflation och löneandelen.
Tim Duy, "Distributional Impacts of Monetary Policy", 22 april

Dean Baker, "How Is Inflation a Highly Regressive Tax on Wages?", 20 april
Och Krugman:
"The latest fad — illustrated by this piece in today’s WSJ — is that expansionary monetary policy is a giveaway to banks and plutocrats generally. Indeed, that WSJ screed actually claims that the whole 1 versus 99 thing should really be about reining in or maybe abolishing the Fed. And unfortunately, some good people, like Daron Agemoglu and Simon Johnson, have bought into at least some version of this story."
Paul Krugman, "Plutocrats and Printing Presses", 20 april

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