The Dogs of Inflation
Keynesians Again Revive the Phillips Curve Folly Robert Higgs has provided a most applicable biblical passage that very aptly describes the continuing knee jerk revival of the Keynesian follies during this Fed-Bush-Obama Great Recession and Great Stagnation:
“As a dog returneth to his vomit, so a fool returneth to his folly.” Psalm 26:11.
Frank Shostak, in his excellent Mises Daily “Inflation Does Not Produce Economic Growth,” identifies another culprit, Chicago Federal Reserve Bank’s Charles Evans. For an in depth critic of the Phillips Curve from an Austrian perspective see Adrian Ravier’s excellent Dynamic Monetary Theory and the Phillips Curve with a Positive Slope.
The “more inflation” argument keeps coming back which is why it continually must be whacked down. Salerno’s and my attempts from two years ago are here and here. Krugman, Mankiw, Bernanke and Company were then the dogs of more inflation. How soon given hidden rot in labor market news before Ms. Yellen joins them?