Your Inflation May Vary

Push & Pull

New to Us

Relative Impact

Where Is US Inflation Headed?

Living Longer with Mike Roizen

First Jackson Hole Thoughts

British Columbia, Salmon Fishing, and Then?

People who think about the economy are a non-random subset of the population. Most folks aren’t like us. Worse, we aren’t always like us. Hence the endless arguments.

Currently our subset is debating whether we face inflation or recession. In my view, it’s not an either/or question: We can have inflation and recession. That’s why I keep talking about “stagflation,” an economy afflicted with both problems.

Of the two, I think inflation is the more serious threat. I don’t minimize the pain many will feel from recessionary conditions. The difference is recessions have a lower limit. The economy can only shrink so much, then recessions end. Periods of inflation, if allowed to persist, can get infinitely worse and last a long time.

Everyone’s inflation experience is unique. We all have our particular spending patterns, so our experience will feel worse if inflation is more severe in the goods and services we normally buy. Or we might not notice it as much as others do. For example, if you already own your own home, you don’t really worry about housing inflation (unless you want to sell).

Similarly, inflation varies among countries, even those with close economic connections, due to the underlying causes and local policies. Today we’ll explore some of this international variation, drawing on new research from the Chicago Federal Reserve Bank, and then end with quotes from Jerome Powell at Jackson Hole, sounding like Paul Volcker.

Bottom line: Inflation as we see it in the US really is different.