Thanks, that was very interesting. I need to think about it some more. Joanna
At 12:18 AM 07/06/2002 -0500, you wrote: >I have always considered inflation to be a *general* rise in the price >level, rather than a rise in specific prices which feed into the CPI or, >as we used to call it, the COL. This came to the fore in the early >1970s when 'inflation' (sic) took off. But at least in the early years >of price increase, it was not *general* but rather the rise in _real_ >cost/price of food and, after 1973 and the cartelization of energy, of >oil prices. After that, it became a distributional issue with the state >intervening to ensure that (at least in Canada) that the increase in >price of energy resulted in a shift in income from labour to capital >through wage controls, etc. The monetarists picked this up and >after the mid-1970s used monetary policy to do the same thing. >The point I am trying to make is that the 'inflation' was not a >'general rise in prices' but a rise in specific prices that were not >demand generated but supply (monopoly) generated. That is not >inflation, at least not in the Keynesian sense. Surely, the increase >in the cost of HMOs, drugs, education and a lot of the elements >that go in to the CPI are not a measure of "inflation" but rather a >measure of market power using differential price increase to >redistribute income to the powerful. Does this not give a very >different meaning to CPI as a measure of market power and not of >'inflation', at least as is meant from a Keynesian (or radical) >perspective?
