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2017-10-25

My modest conribution to solving the conundrum of missing NAIRU inflation

We all know from our first economics textbooks that demand can leak, into savings or imports.

We all know that more and more of things are imported from China.

When demand in countries like Sweden increases a lot of it goes to buying flatscreens TVs. From Asia,

The conslusion is therefore that the effect should be seen not only in CPI but also more and more in the current account.

This of course is something that every Master of The Universe economist knows. 

But why do the not write about it? Too simple and already in their models?


The relationship between slack and inflation nonetheless appears to hold at global level.
John Plender FT 3 October 2017


What is the “stall speed” of an economy?
Unemployment tends to rise when GDP growth falls below about 2.5-3 per cent
Gavyn Davies blog June 15, 2011

U.S. Trade and Current Account Deficit




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