DailyKenn.com — Prediction: Joe Biden will take credit for increased wages, but not for higher prices.
Do higher wages drive higher costs of goods and services? Or do increased costs mandate higher wages? Or both?
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Those are questions that have challenged economists for decades. Now, there is yet another question: Are today's higher prices and increased wages transitory? Or are they the onset of persisting inflation for years to come?
Take away...
• One more question: Is the far-left mainstream media covering for Biden's inflation?
The Federal Reserve has been extremely clear that it believes inflation will be transitory.
"An
episode of one-time price increases as the economy reopens is not the
same thing as — and is not likely to lead to — persistently higher
year-over-year inflation into the future," Fed Chair Jerome Powell told
reporters late last month. "Indeed, it is the Fed's job to make sure
that that does not happen."
Most economists agree with this view, even if they admit we're in unprecedented territory. In a paper published on Friday,
top economists, including Laurence Ball of Johns Hopkins University and
Gita Gopinath, the chief economist at the International Monetary Fund,
said they expect "a rise in inflation that is modest and temporary," and
note that government spending under the Biden administration doesn't
appear to be a threat.