Jim Devine wrote:
One of the problems is that financial assets are, strictly speaking,
nothing but claims on real goods and services (now and in the future).
Exactly
You don't want to "double count."
Also true
So it's best to keep real goods &
services inflation or deflation conceptually separate from asset-price
inflation or deflation.
Huh?
Isn't asset-price inflation the result of leakages from the current
income circuit? i.e. the supplement from outside the current income
circuit, to maintain a wages=prices identity; according to Keynes's
prescription to sustain full employment? An exercised claim from
inflated disinvested assets means an excess of available purchasing
power for existing real goods and services. There has to be at least a
lagged but direct effect on the latter's prices. If so, I fail to see
the logic of conceptually separating these two domains, as subject to
both inflation and deflation; for that's exactly where the "double
counting" would come in.
John V
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