Rate Hikes Are Not the Right Answer to “Wage-Price Persistence”
Headlines about high inflation continue to feed into commentaries demanding that the US Federal Reserve increase interest rates to curtail demand. Yet not only would this approach benefit money-holders at the expense of many workers, businesses, and consumers; it also is not even the best way to contain rising prices.
https://prosyn.org/PA8xNuz
TOWNSHEND, VERMONT – It is a bit jarring when a secure and comfortable professor writes that others must lose their jobs so that inflation can be contained. And it is even worse if he explains that “the only solution … is to restrain demand” through higher interest rates – a very good solution for those with cash on hand. But let me reply on the merits to Jason Furman’s recent call for this “solution.”