Is Inflation “Non-Transitory”?
Brad DeLong: “This is, as I say over and over again, not a 1970s like inflationary spiral—not melting the engine—but rather leaving rubber on the road as you rejoin the highway traffic at speed. Rejoining the highway traffic at speed is a good thing to do. Leaving rubber on the road is a necessary consequence of doing that. It’s stupid to complain about it. […] You have to incentivize movement into the sectors that need to expand by creating price differentials vis-a-vis the contracting sectors. And with their wages (and some of their prices) downward-sticky, that is a transitory burst of inflation.”