Re: Interest Rates and inflation

[Bruce McFarling <ecbm@xxxxxxxxxxxxxxxxxxx>]

On Wed, 27 Dec 2000 15:16:37 -0800, John O'Donnell
<jackodonnell@xxxxxxxx> wrote, under the title:
"Re: Interest Rates and inflation",

"Alan G. Isaac" wrote:

<<SNIP>>

>> when unemployment is low workers are more likely to
>> win wage increases, which will tend to be larger
>> when inflation expectations are higher.

>But so as to not leave your last "obvious" assertion
>hanging, I suggest you try to write a rational equation
>relating the variables you assert to be true "in the short
>term" that can pass a dimensional analysis. In case you
>don't understand what that is, it is a very useful method to
>identify causality. Causality, in turn, is the condition
>that can not exist for the assertions you make because it is
>a tautological certainty that it can not exist.

Of course, the challenge is based on the truly bizarre
premise (but very conventional within mainstream economics,
which is a reason economics is such an odd duck in the
social sciences) that an economic relationship does not
exist unless it can be expressed as an equation.  "Mechanism,
mechanism, uber alles".


Virtually,

Bruce McFarling, Shortland, NSW
ecbm@xxxxxxxxxxxxxxxxxxx