Inflation and deflation at the same time

Originally posted by Infose: ↑

"is trying to predict what those parameters will be ahead of time."

One thing that he model predicted and did so quite well was that money printing under a liquidity trap would not cause inflation. If you were here 11 years ago hyperinflation was the buzzword. Then due to it not materializing the buzzword changed to fake statistics. Today the buzzword morphed once more. For the Peter Schiffs it is still hyperinflation but for some apparent Austrians posting here it is credit crunch followed by a depression as the bond vigilantes are about to restore the primacy of the markets (the good) over central bank monetary policy intervention (the evil). And because for them economics is a morality play, we have to suffer a massive depression in order to eliminate the consequences of our recent past and present day excesses.

In Japan they lost a decade by opting for a stop and go approach. However, the present day indications are that the consequences of approach to economic management have been learned.

The model has its faults one being the fact that it is an ad hoc model. It puts you in a depression environment without telling you how you got there because its concern it about how to get out from it, and as far as inflation is concerned it just warns you not to allow GDP to pass the full employment line.

The question being: how do you know if the vertical full employment line has been passed? Apparently by looking at wages, that is, the price of labour.

https://www.ldoceonline.com/dictionary/stop-go-approach-policies-etc

A more complex explanation of the IS-LM model available here: https://s3.studentvip.com.au/notes/4579-sample.pdf

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but for some apparent Austrians posting here it is credit crunch followed by a depression as the bond vigilantes are about to restore the primacy of the markets (the good) over central bank monetary policy intervention (the evil).

For god's sake will you stop imposing your Austrian school theory onto others?
I'm not an Austrian, not even an apparent one unless you're really bad at spelling Australian.

We're exploring possible economic dynamics here and nothing is more annoying than being misinterpreted or told what you're supposedly thinking.
But more importantly, the investor money goes out of productive and into housing speculation.

Not every cycle repeats identically. Great you're discovering it's not necessarily binary on inflation vs deflation.

Also an important qualification, during the Great Depression, unemployment was around 24%.
Right now, the adjusted unemployment rate is around 20%, taking into account people who've given up looking and with small unreliable contracts.

That's a LOT of hidden unemployment that nobody wants to talk about. This is structural.

To put the implications another way, the official unemployment rate might purportedly be 4-5%, but to someone unemployed the rate is 100%.