Interesting new paper on people's understanding of inflation (survey experiments)
- inflation perceived as unambiguously negative
- resistance to rate hikes, support for rate cuts
- support for corporate tax hikes, assistance for vulnerable households, tax hikes for top incomes

Germany builds few new homes compared to other advanced economies.

Which “solid recovery“ in Europe is the IMF talking about? There is none. One quarter of a bit higher growth in the context of stagnation doesn’t justify larger fiscal contraction. Don’t we remember how this affected past “recoveries“? Repeating the same mistakes again and again.

Which “solid recovery“ in Europe is the IMF talking about? There is none. One quarter of a bit higher growth in the context of stagnation doesn’t justify larger fiscal contraction. Don’t we remember how this affected past “recoveries“? Repeating the same mistakes again and again.

Wages in the €zone typically react to headline inflation with a lag. As headline inflation has recently fallen strongly, we must also expect wage growth to fall markedly.

via Ángel Talavera

Germany builds few new homes compared to other advanced economies.

Wages in the €zone typically react to headline inflation with a lag. As headline inflation has recently fallen strongly, we must also expect wage growth to fall markedly.

via Ángel Talavera

Britain has by far the highest rate of homelessness in advanced economies.

Fiscal austerity increases votes for populist parties. Economically vulnerable voters react most strongly to austerity. New paper in the American Journal of Political Science with evidence for Europe.

The ECB's interest rate hikes have led to a marked rise in lending rates to the private sector. Lending rates on new loans are, however, past their peak.

Bernanke/Blanchard: the inflation surge was primarily driven by a series of supply disruptions and increases in the relative price of energy and food. In stark difference to the 1970s, shocks did not trigger a wage price spiral and the inflationary effects were not persistent.