Nobel Laureate says deflation good and the gold standard "not a bad idea"

#1
Link : http://www.wiwo.de/politik/konjunktur/nobelpreistraeger-sargent-wiedereinfuehrung-des-goldstandards-denkbar/9081242.html

Translate to english plz.

"Historically, there is no reason to fear deflation," Nobel Laureate Thomas Sargent explains to Germany's Wiwo.de, "we all benefit from lower prices." Crucially, he continues, "countries with declining prices, such as Greece, must improve the competitiveness they have lost in recent years," requiring falling wages and rising productivity (and falling unit labor costs) which will lead to companies cutting prices, "this is not a dangerous deflation, but part of the necessary correction so that these countries are internationally competitive again." That central banks pursue an inflation rate of around 2%, Sargent blasts, is because they consider it their job to "make bad debt good debt," adding that inflation is "a major redistribution machine - reducing the real debt burden for the benefit of creditors and devaluing the assets of the creditors." A return to a gold standard,he concludes, to prevent governments and central banks from limitless money-printing "would not be foolish."


TL DR : Up yours Keynesians.
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Last edited by sage76 at Nov 16, 2013,
#2
ok
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hard sciences don't have correct and incorrect answers actually
#5
Yea.. nope. I don't see how it's possible that "we all benefit from lower prices" if it "requires falling wages". Fucking kapitalist pig.
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#6
yeah nah we need inflation up to at least 4% plz and going back to a gold standard would be pretty bad Id say
pinga
#8
Quote by the bartender
Yea.. nope. I don't see how it's possible that "we all benefit from lower prices" if it "requires falling wages". Fucking kapitalist pig.


Because everything else falls back in like with the wages. It's inflation that causes austerity due to wages not keeping up with costs, and then kills the value of any currency (see: dollar) which causes the crashes.
Increasing productivity by installing better investments and competitive markets will be far better in the long but not that long run.

Too many people are concerned with getting this fixed overnight which just isn't going to happen.
#9
Quote by sage76
Link : http://www.wiwo.de/politik/konjunktur/nobelpreistraeger-sargent-wiedereinfuehrung-des-goldstandards-denkbar/9081242.html

Translate to english plz.

"Historically, there is no reason to fear deflation," Nobel Laureate Thomas Sargent explains to Germany's Wiwo.de, "we all benefit from lower prices." Crucially, he continues, "countries with declining prices, such as Greece, must improve the competitiveness they have lost in recent years," requiring falling wages and rising productivity (and falling unit labor costs) which will lead to companies cutting prices, "this is not a dangerous deflation, but part of the necessary correction so that these countries are internationally competitive again." That central banks pursue an inflation rate of around 2%, Sargent blasts, is because they consider it their job to "make bad debt good debt," adding that inflation is "a major redistribution machine - reducing the real debt burden for the benefit of creditors and devaluing the assets of the creditors." A return to a gold standard,he concludes, to prevent governments and central banks from limitless money-printing "would not be foolish."


TL DR : Up yours Keynesians.

I´m not so sure. Falling prices have also caused people to postpone their purchases. Inflation does just just not lower debt, but also makes future purchases more expensive giving a reason not to postpone everything too long.

End of the story : pros and cons people. Just like everything in economics.
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#10
I'd prefer to see an article of his actual answer instead cherry picking quotes
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#11
Everybody's going to come into this thread like they're a complete expert in economics.
#12
A thread about the economy?

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#13
Quote by the bartender
Yea.. nope. I don't see how it's possible that "we all benefit from lower prices" if it "requires falling wages". Fucking kapitalist pig.

Lol hating capitalism is so cool amiright?
#14
I'm too concerned about getting the disorganized mess that is my shit in order to care about a nobel laureate discussing global economic theory.
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#15
can we get some diagrams or pie charts up in this shit? you're not selling it to me
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#17
cpnsnazz it's better if you read what he says in a schwarzenegger accent.

That central banks pursue an inflation rate of around 2%, Sargent blasts, is because they consider it their job to "make bad debt good debt

But yeah that doesn't sound like a viable idea. The small bank-centered system seems to be working well enough for them though, or at least better than market-centered financial systems.
#20
Because the US economy was totally stable when it was on the gold standard, right?
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#21
the nobel prize is a hokey scam. ffs they gave obama the peace prize & that cat is killin' people left & right with fckn' drones. open yr. eyes.