Thursday, August 24, 2017

Jackson Hole stuff

CNBC - at Jackson Hole, the death of a model.

The Phillips Curve is the central theory for the Fed's dual mandate of limiting inflation and maximizing employment, so it's really going to suck when they realize that inflation and unemployment are not necessarily correlated at all.

What's less likely is that academic economists ever fucking realize that wage growth is dependent on political economy, not some stupid fantastical perfect competition model for labour.

Cos once you realize that labour is paid below its perfect competition equilibrium wage, that firms buy labour in an oligopsonistic market, then really the only sensible thing to do is throw out orthodox general equilibrium altogether, ask "what is the actual econometric data telling us", and then look for entirely fucking sensible political economy explanations that have been around since, oh, Das Fucking Kapital.

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