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".