Dorothy And The Frankenstein Cycle
"Toto, I've a feeling we're not in Kansas anymore," said macro watcher after macro watcher in the 2020s, as inflation, wages and nominal growth all exploded higher across the developed world.
At the 30,000-foot level, the only macro question that matters is whether The Great Moderation is over for good or whether we'll work our way slowly back to secular disinflation. A related question asks if we were wrong to characterize The Great Moderation as a "new normal" in the first place.
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Right now my most probable outcome over then next few decades (an obvious exercise in futility) is a sudden and deep re-emergence of disinflation and possibly (probably?) outright deflation followed by long term stagflation with inflation running between 3% and 5% with a likely average of between 3.5-4%.
The return to the most recent macro paradigm of systemic disinflation is very unlikely. We are at a very different place economically and politically (both global and domestic US) than we were in the early 80’s.
I generally agree with your assessment but in case you or other readers didn’t check, at 2% inflation in ten years a dollar will have lost 19% of its purchasing power. With 4% inflation, the corresponding loss is 33%, not an insignificant decline. 4% doesn’t seem like much but in 20 years it will cost one 55% of their money.