Unmasking Inflation: Why Conventional Wisdom Fails and Heterodox Views Offer Better Solutions

The episode also delves into historical periods, such as the "Golden Age of Capitalism" (1940s-60s) where inflation was subdued due to wages growing with productivity, and the "Great Moderation" (1980s-recent) which he attributes not to wise central bank management but to wage stagnation and globalization, particularly the influx of products from East Asia. Renango concludes by stressing the critical importance of heterodox economics, as it offers alternative lenses and solutions, allowing for a more accurate diagnosis of inflationary pressures across different countries and historical contexts. He warns that relying on a single theory can be detrimental, as "one theory might be the wrong theory at the wrong time," underscoring the need for diverse theoretical frameworks to address complex economic challenges.

"the best policy is accurate to in my view to try to compensate workers for the effects of inflation"

"the conventional Friedman sort of story if you want to give that this sort of more conventional Orthodox view of inflation was that it was caused by excesses of the FED printed too much money"

"on the left the notion was... that it was cost push it was the oil shock but also that it was distributive conflict"

"by the kovid era I think that there is a Resurgence of a view on the left or a teradox groups in economics to suggest that it's corporations that corporations increased prices and that's what's behind the crisis"

"if axon is producing oil in the you know Gulf of Mexico and the price of oil internationally goes up and their costs are the same the profit margins go up no doubt but it's not the cause of inflation it's the result of inflation"

"I still think that this is something that is not persistent exactly because I think that the working class is not strong enough and wages are not going to go up"

"it's stagnation of wages that has led to the great moderation and globalization"

"the problem with having just one theory is that one Theory might be the wrong Theory at the wrong time"

"the importance of a paradox economics is that it allows us to think certain things from you know look it with a different lens and and provide alternative Solutions"