Sunday, March 18, 2007

Stagflation Is Not "Mixed Signals"

AFP reporter Rob Lever reports about the dilemma for the Fed as inflation remains high, while the subprime mortgage meltdown creates a risk of a recession. So far, so good, that's what I've been telling you for some time.

The problem is that he labels this as being "mixed signals", thus revealing his Keynesian bias. But the combination of falling output and rising inflation is not a case of "mixed signals". It is a case of stagflation.


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