tag:blogger.com,1999:blog-6616959642391988608.post6246144011222381212..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: Capacity utilization and inflationScott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-6616959642391988608.post-68779225191893088432009-07-10T17:30:38.867-07:002009-07-10T17:30:38.867-07:00Scott,
It's important to remember that inflati...Scott,<br />It's important to remember that inflation is always and everywhere not a monetary phenomenon at all but rather a phenomenon related to labor underutilization. You'll see that I'm right in the months ahead.Mark A. Sadowskihttps://www.blogger.com/profile/13147923641894915172noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-14889384076795129762009-07-09T17:18:56.486-07:002009-07-09T17:18:56.486-07:00PacificAllen: I share your belief in the importanc...PacificAllen: I share your belief in the importance of gold, but I think that the CPI does do a pretty good job of measuring inflation over longer periods. In fact, I agree with the Boskin study that says the CPI tends to overstate inflation somewhat--about 0.5% per year.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-87005483907748155502009-07-09T17:17:30.433-07:002009-07-09T17:17:30.433-07:00Dale: Capacity utilization is a nebulous concept t...Dale: Capacity utilization is a nebulous concept to begin with, and all the Fed can do is estimate what it is. Also it now represents only about 30% of the economy (i.e., goods production). It is however a good proxy for "slack" in the economy, but I wouldn't want to base policy decisions on it.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-23373039256287697732009-07-09T17:10:46.512-07:002009-07-09T17:10:46.512-07:00Hey Scott,
You're absolutely right. Inflation...Hey Scott,<br /><br />You're absolutely right. Inflation (and deflation) has always been a monetary phenomenon. And just like the classicalists (now renamed supply siders) I look to gold as a real time indicator of how far off the dollar is from its 10year moving average. If the dollar price to gold stays at these levels ~$900, inflation will be 5.5% a year for the next 10-15years. Of course,Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-71923236353473636832009-07-09T15:37:23.341-07:002009-07-09T15:37:23.341-07:00Scott,
Do you know roughly what capacity is being...Scott,<br /><br />Do you know roughly what capacity is being measured in capacity utilization? Manufacturing is such a small part of the US economy (mining and manufacturing wage and salary accruals = 12.6% of national wage and salary accruals, according to NIPA table 6.3D. for 2007) while Services PCE = 44% of GDP vs. in Q1 2008 vs. 28.6% 40 years ago (NIPA table Table 1.1.5.). Is the capacity DaleWhttps://www.blogger.com/profile/16369657928022546882noreply@blogger.com