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Interest rates 'may hit 8pc' in two years
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we've explained it to you too many times nowGraham_Devon wrote: »All I wanted to know is how you are defining wage inflation everytime you use it in reponse to inflation rising. Yet you will simply NOT tell me.
no i want to talk about wage inflation in it's correct way and definition not in the Devonian Economic Theory definition which is 100 % wrong....Graham_Devon wrote: »You want to talk about wage inflation in a way you will always be right.
no Devon stop it - please stop it. this isn't what Wage Inflation means.Graham_Devon wrote: »Wage inflation at 1% when general inflation is 5%
here's the definition from the Financial Times
http://lexicon.ft.com/term.asp?t=wage-inflationwage inflation = Increase in people's pay.
if you think they are wrong feel free to let the Financial Times know they're wrong too0 -
I hate to say this, but I think Graham is just pointing out that the rate of wage inflation might be lower than the rate of general inflation, which is true enough. That leads to an unaffordability spiral, where the price of goods and assets runs away from the general populace.
But then again, if wage inflation doesn't match general inflation then demand inevitably reduces and prices fall. As the author points out, you need to have too much money chasing too few goods to increase prices.0 -
I hate to say this, but I think Graham is just pointing out that the rate of wage inflation might be lower than the rate of general inflation, which is true enough. That leads to an unaffordability spiral, where the price of goods and assets runs away from the general populace.
My take on it (what Graham asked) is, do we think in general does wage inflation stay the same or is less than general inflation.
My answer is there is no way of knowing as it can depend on many things.
Personally for this article the following extract seems appropriateSuch economists claim that the reason that high economic growth and inflation are often observed together is that when the government creates inflation by printing fiat money, the inflation tricks capitalists into increasing production, which created the illusion of an economic boom. The "spiral" of increasing prices and wages, however, can only continue as long as the government continues to intervene in the economy by inflating the money supply.
As Hazlitt explained: "If it were not preceded, accompanied, or quickly followed by an increase in the supply of money, an increase in wages above the "equilibrium level" would not cause inflation; it would merely cause unemployment. And an increase in prices without an increase of cash in people's pockets would merely cause a falling off in sales. Wage and price rises, in brief, are usually a consequence of inflation. They can cause it only to the extent that they force an increase in the money supply."
The guy is talking about more QE, so thinks that that will mean increased wages and prices.0 -
don't flatter him with being that clever...I hate to say this, but I think Graham is just pointing out that the rate of wage inflation might be lower than the rate of general inflation, which is true enough. That leads to an unaffordability spiral, where the price of goods and assets runs away from the general populace.
But then again, if wage inflation doesn't match general inflation then demand inevitably reduces and prices fall. As the author points out, you need to have too much money chasing too few goods to increase prices.
i tried explaining it in the below post not too long ago - he didn't get it then unfortunately
https://forums.moneysavingexpert.com/discussion/comment/35260911#Comment_35260911You can have wage inflation less than general inflation and still get HPI like in my post above. general inflation 6%, wage inflation 4% and HPI 2%, i don't see negative HPI in this scenario. what i'm saying is that you don't get negative HPI in this scenario.
he never bothered to respond then so i don't expect him to understand it now...0 -
I hate to say this, but I think Graham is just pointing out that the rate of wage inflation might be lower than the rate of general inflation, which is true enough. That leads to an unaffordability spiral, where the price of goods and assets runs away from the general populace.
But then again, if wage inflation doesn't match general inflation then demand inevitably reduces and prices fall. As the author points out, you need to have too much money chasing too few goods to increase prices.
Well I hate to say this, but I've thanked you
Exactly. All I want to know is what they mean by wage inflation when they keep using it in response when discussing inflation.
I don't personally think it requires some rocket science answer?
Either they are saying wage inflation will keep pace with inflation, or they aint. But all we can all get is "well, with inflation, you will get wage inflation". Ask about what they mean by wage inflation in relation to inflation, and all you get is "you dont understand, devon economic theory, mr muddle".
I'm not asking them to predict the future or anything like that. I'm just asking what they mean when they say it, as it's being used a fair bit now.
Driving me up the wall.0 -
Graham_Devon wrote: »Either they are saying wage inflation will keep pace with inflation, or they aint.
I'm not asking them to predict the future or anything like that.
You are I have posted you links !!!!!! how it can pan out usually.Usually you get a spark for price inflation (eg oil 70s) then wages follow or overtake, then you get more inflation did you not look at that link?
http://en.wikipedia.org/wiki/Price/wage_spiral
No one could say for certain which you would get first or which one would be highest.
Do you know?
The main factor is how inflation is supported.
Yo seem to have ignored everything I had showed you. Surprise.0 -
Did you notice the top of that link?You are I have posted you links !!!!!! how it can pan out usually.Usually you get a spark for price inflation (eg oil 70s) then wages follow or overtake, then you get more inflation did you not look at that link?
http://en.wikipedia.org/wiki/Price/wage_spiral
No one could say for certain which you would get first or which one would be highest.
Do you know?
The main factor is how inflation is supported.
Yo seem to have ignored everything I had showed you. Surprise.
This article contains weasel words, vague phrasing that often accompanies biased or unverifiable information. Such statements should be clarified or removed. (January 2009)
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You are I have posted you links !!!!!! how it can pan out usually.Usually you get a spark for price inflation (eg oil 70s) then wages follow or overtake, then you get more inflation did you not look at that link?
http://en.wikipedia.org/wiki/Price/wage_spiral
No one could say for certain which you would get first or which one would be highest.
Do you know?
The main factor is how inflation is supported.
Yo seem to have ignored everything I had showed you. Surprise.
Alright really. Let's leave it there eh?
It's getting a lil silly, as now, you are saying no one knows. But have quite clearly told us differently and have quite clearly said with inflation comes wage inflation. So you knew, up until the point you were questioned, and now, all of a sudden, its impossible to say.
If you yourself can't even tell me what you are talking about and describe your own words and thoughts when you describe a situation it's no wonder we often end up in these stupid to and fro posts.0 -
Graham_Devon wrote: »Rubbish.
Don't need growth in our economy for inflation to rise.
We can import inflation.
And yet again, were back to wage inflation being talked about, with no indication of whether you mean "any" wage inflation, or wage inflation keeping up with general inflation.
The whole wage inflation discussion is completely pointless if you won't determine what you are talking about.
Just as likely we have import deflation one year and inflation the next i.e. they are likely to cancel each other.'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
Use another source then, google wage spiral, I have not made it up.Did you notice the top of that link?
This article contains weasel words, vague phrasing that often accompanies biased or unverifiable information. Such statements should be clarified or removed. (January 2009)
.
http://www.investorwords.com/5850/wage_price_spiral.html
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