On 10/26/05, Daniel Davies <[EMAIL PROTECTED]> wrote: > <Of course we all know asset bubbles simply aren't examples of > inflation.............:-> > > yes, they damn nearly put an asterisk next to Kenneth Arrow's Nobel Prize > when he pointed out that under the Arrow-Debreu assumptions, they are. > > dd
----------------------------- Apropos the 'papers' that G. Kohler was kind enough to send the link for, I found this little tidbit in the pdf by Sardoni and Wray: "Many believe that the rate hikes that began in 2004 were designed to slow real estate speculation, in spite of the Fed's frequent claims that bubbles are impossible to identify. Finally, it is abundantly clear that the Fed continually guards against wage-driven inflation, raising rates even before labor markets tighten, but it openly accepts profits-driven inflation. Indeed, during early 2004 the Fed refused to raise rates even as profits boomed, arguing profits inflation would be self-limiting—while it implicitly adopts the position that wages inflation is not. This represents a clear bias against labor in favor of entrepreneurs (Wray 2004)." Who'd a thunk it?!
