You can only say that once you accept inflation to mean "a single number representing price increases", which is so over-simplified as to be laughable. Not to mention easily manipulated by statistical tricks and more obvious tricks like weighing for "feature increase" or using country-wide medians and not weighing those for population distribution.
If you look at real estate prices vs CPI since MMT really began, real estate grew much faster than CPI, in some cities over twice as fast. That is a direct result of all the excess money that wasn't needed for productive endeavours finding a "safe" place to be parked. Similarly having bonds yield below even the cooked inflation number forces safe traditional investors like pension funds to chase stock market returns which was a large contributor to the gigantic bubble that is now popping.
Redefining inflation to mean consumer price increase was a very sneaky move to be sure. A hundred years ago your statement would have been read as "inflation doesn't cause inflation" since it meant any expansion of the money supply.
The ill-defined nature of inflation is an extremely important and often overlooked fact.
Another interesting problem with the concept of inflation:
Thirty years ago, what would've been the "consumer price" of a modern smartphone? Millions, easily.
Same goes for many other technologies that have fallen in price rapidly. (Big screen TVs, speakers, computers, anything with a screen, a CPU or a wireless communication chip really.)
By comparing median total living costs to reflect what's typical. A cell phone and computer are indispensable today, a land line not so much, for instance.
> If you look at real estate prices vs CPI since MMT really began, real estate grew much faster than CPI, in some cities over twice as fast. That is a direct result of all the excess money that wasn't needed for productive endeavours finding a "safe" place to be parked.
Seems like a post hoc ergo proctor hoc fallacy. There are plenty of safe investments that could also be productive, that doesn't say anything about why real estate specifically.
I don't know, but I do strongly believe that the "conventional wisdom" that deflation is a horrible phenomenon that leads to a decades-long depression is bullshit. The entire process of industrialization was hugely deflationary Yet still the 1800s were the first time in history where quality of life for the average Joe improved by leaps and bounds. Diet, medicine, child mortality, wealth all started improving exponentially.
Meanwhile under the monetary alchemists and "stabilizing" regime of central banks real wages have stagnated, crises still occur every 10 years and the entire system is so fragile that one major event could collapse the whole house of cards.
>The entire process of industrialization was hugely deflationary
Prices definitely lowered, but the difference being that while there was also supplier upheaval as artisan/bespoke producers were replaced by mass production - the industrialists were enormously and sustainably profitable and could in turn employ those displaced from the failed producers.
Aggregate demand arguably increased with the move of labour from rural agriculture to urban manufacturing.
A deflationary cycle annihilates demand by definition and fixed costs then eat producers alive - leading to wealth destruction, unemployment, debt writeoffs and credit tightening. Which in turn leads to more demand annihilation.
If you look at real estate prices vs CPI since MMT really began, real estate grew much faster than CPI, in some cities over twice as fast. That is a direct result of all the excess money that wasn't needed for productive endeavours finding a "safe" place to be parked. Similarly having bonds yield below even the cooked inflation number forces safe traditional investors like pension funds to chase stock market returns which was a large contributor to the gigantic bubble that is now popping.
Redefining inflation to mean consumer price increase was a very sneaky move to be sure. A hundred years ago your statement would have been read as "inflation doesn't cause inflation" since it meant any expansion of the money supply.