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by WalterBright 4535 days ago
I've seen a Harvard PhD in economics espouse on TV the false cost-push theory of inflation. It made me wonder what is taught in Harvard econ classes.

Further undermining the credibility of econ degrees is an econ professor from my college stating that he believed in the free enterprise system, and the equal distribution of all income. The contradiction didn't seem to bother him in the slightest.
1 comments
yetanotherphd 4534 days ago
I hadn't heard of cost-push inflation before, and I didn't specialize in macro-economics. Who discredited this theory? The Wikipedia article says that according to Keynsians (and most modern economists are neo-Keynsians who beleive in sticky prices), prices are sticky downwards and so a supply shock to a single good would cause inflation. This seems to be an issue that could be resolved empirically. Are you familiar with the empirical evidence?

On your second point, perhaps your professor meant that he believed in free enterprise, but wanted to use the taxation system to make post-tax income much more equal? If so, there is no contradiction.

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WalterBright 4534 days ago
> I hadn't heard of cost-push inflation before, and I didn't specialize in macro-economics. Who discredited this theory?

Cost-push is described in Reisman's tome "Capitalism" and is shown why it is a false theory starting on pg. 907.

> perhaps your professor meant that he believed in free enterprise, but wanted to use the taxation system to make post-tax income much more equal? If so, there is no contradiction.

I quoted his exact words, and he did not qualify them. In particular he did not say "more equal", he said "equal". I remember it to this day because I was astonished.

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yetanotherphd 4533 days ago
>Cost-push is described in Reisman's tome "Capitalism" and is shown why it is a false theory starting on pg. 907.

I couldn't understand that. One difficulty is that not only do Austrian economists use a different language to describe things, but it seems to be arguing against a traditional Keynesian viewpoint. Right now PhD programs don't teach any traditional Keynsian econ, (undergrad programs teach a bit), they skip straight to neo-Keynsianism, which only keeps a few ideas from the original Keynes (e.g. sticky prices). So I don't really understand what the article is arguing against.

I already gave a description of what I thought the sticky-prices based argument for cost-push inflation was. Can you explain in your own words how this particular argument is refuted?

Re the professor, I guess I'll just chalk that up to a bad professor.

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