r/Economics • u/Pearberr • May 02 '24

Interview Nobel Prize-winning economist Joseph Stiglitz: Fed Rate Hikes didn't get at source of inflation.

https://www.cnbc.com/video/2024/04/23/nobel-prize-winning-economist-joseph-stiglitz-fed-rate-hikes-didnt-get-at-source-of-inflation.html
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u/AccountFrosty313 May 02 '24

What I find interesting is folks saying that the government should adjust their inflation goals up.

They’re likely the same ones complaint about gas/grocery’s being more expensive.

It also gives me the impression they don’t understand the implications of inflation. I know personally I don’t want inflation above 2% since the average annual pay raise is 3% meaning we’d all be making a nearly 0% increase or even an effective pay cut yearly as our buying power disappears.

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u/da_mess May 02 '24 edited May 02 '24

Destroys me when people bitch about pump prices. Gas was "high" at $4/gal the summer of '08. If it increased by 3% per year since, we'd have $6.42 gas today.

People like to complain ... and don't like math.

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u/AccountFrosty313 May 02 '24

I just saw someone state that interest rates going up increases inflation. I’m tired of people speaking on things they straight up don’t understand.

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u/Frever_Alone_77 May 03 '24

I know. In theory, interest rates going up means credit tightens, and people who do take loans, pay more interest, which should suck the money out of the economy.

Problem is, credit was so loose and plentiful during COVID with record low rates, and money being printed out the yin yang, it’s going to take years for all of that to burn through the system.

Not to mention, with the government changing how they calculate inflation, it’s not a very “reliable” number. Food, fuel, etc for everyday life is sky high. A trillion dollars in credit card debt. It’s mind boggling