I'm not familiar with the study of economic shortages, but I always assumed that the conventional explanation was a modification of the Shleifer Vishny theory. Instead of bureaucrats intentionally inducing shortages and then collecting the bribes (Shleifer Vishny), the bureaucrats and workers were insufficiently rewarded for working hard and unsufficiently punished for not working, so they became lazy and unproductive. Note that this modification also explains why shortages exist in the Covid economy, even though bribery is not suddenly a major problem today. It also explains why long-term shortages are especially prominent in goods and services provided by the US government and non-profit sectors.
Ebb and Flow - so many events in life, nature and economics not only reflect this to and fro but are a requisite adjunct to how everything homes into its targets by varying trajectories, directions and velocities of change. Thanks Joseph and Happy Holidays.
really interesting article, but if I understand it correctly, Kornai's view is not dissimilar to Keynes' where the description of a harder budget constraint simply means tighter monetary policy in an effort to reduce demand, hence reduce the supply constraint. Still, a very interesting perspective. Thank you
Put your flamethrowers on high and aim em at my freezing ass.
How did the Fed not see inflation coming when free money was pouring into households during the pandemic? Many households in the bottom 50% made more staying home. They got to see how the top 10% live - lots of money for doing nothing. Makes you aspire to a better paying job.
To me this is about data. How it's gathered and compiled.
I plead ignorance and need the heat But does the Fed access the Metadata from consumer spending and household zip code.
I’ve always found the Shleifer Vishny story compelling https://scholar.harvard.edu/files/shleifer/files/pervasive_shortages.pdf
I'm not familiar with the study of economic shortages, but I always assumed that the conventional explanation was a modification of the Shleifer Vishny theory. Instead of bureaucrats intentionally inducing shortages and then collecting the bribes (Shleifer Vishny), the bureaucrats and workers were insufficiently rewarded for working hard and unsufficiently punished for not working, so they became lazy and unproductive. Note that this modification also explains why shortages exist in the Covid economy, even though bribery is not suddenly a major problem today. It also explains why long-term shortages are especially prominent in goods and services provided by the US government and non-profit sectors.
Ebb and Flow - so many events in life, nature and economics not only reflect this to and fro but are a requisite adjunct to how everything homes into its targets by varying trajectories, directions and velocities of change. Thanks Joseph and Happy Holidays.
Joseph, what an interest article. Even useful to think about cronicón inflation in Argentina where rational budget constraints do not work very well
Sorry guys. Accidently hit the send button - not used to this platform.
I guess my point is that with all the varied data available, the Fed should be able to see the train further back in the tunnel.
Merry Christmas everybody.
really interesting article, but if I understand it correctly, Kornai's view is not dissimilar to Keynes' where the description of a harder budget constraint simply means tighter monetary policy in an effort to reduce demand, hence reduce the supply constraint. Still, a very interesting perspective. Thank you
Put your flamethrowers on high and aim em at my freezing ass.
How did the Fed not see inflation coming when free money was pouring into households during the pandemic? Many households in the bottom 50% made more staying home. They got to see how the top 10% live - lots of money for doing nothing. Makes you aspire to a better paying job.
To me this is about data. How it's gathered and compiled.
I plead ignorance and need the heat But does the Fed access the Metadata from consumer spending and household zip code.