What is Actually Causing Inflation? A Deep Dive (ft. @unlearningeconomics9021)

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The Great Inflation Debate: Who is Actually Winning?

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Timestamps:
0:00 - introduction
1:30 - Inflation Basics
8:42 - Job Opportunity
9:39 - Aggregate Supply & Demand
10:32 - Supply Push Inflation
13:47 - Judging Supply Arguments
17:35 - Demand Pull Inflation
19:31 - Money Printing
25:01 - Judging Printing Arguments
33:25 - Hot Labour Markets
37:25 - Judging Labour Arguments
43:12 - Demand Shift Inflation
45:06 - Inflation Expectations
47:11 - Judging Expectations
53:11 - Exchange Rates
54:13 - Reviewing Channels

Narrated and filmed by Dr. Joeri Schasfoort (University of Groningen)

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I don’t have anything interesting or funny to add, but I know engagement means a ton to the YouTube algorithm. So I’ll just say, thank you for the channel and everything you’re doing. It’s a breath of fresh air.

alexandercallender

Best (respectfully formulated) counterpoints will be featured in this thread (but please don't comment here).

Three notes. (1) The discussion with UE took place in November before we got the news about Omicron. (2) Transitory = till just after the pandemic ends (3) if you disagree with our takes, do let us know :), especially with proper arguments.

MoneyMacro

So this is basically the age old economics problem of "How long is the short term?". Or to misquote a conversation I heard "In the long run, everything works out. But in the long run, we're all dead"

nr

Bro, I have a degree in finance (with honors) and I work in asset management so I have some educational and professional background on the topic of economics. Its incredibly difficult to find purely educational content like this online without some sort of bias that's usually geared towards pitching some investment. I've seen two of your videos and I'm incredibly impressed. For one, I never realized just how much economics is theoretical which leads to a strong divide in opinions between world class economists. The only slight critique that I have is the inclusion of Peter Schiff who is always pandering gold as a good investment and as such his opinions are clearly biased. Otherwise, phenomenal job and thanks for the amazing dive into current economics from various points of view. Cheers!

MrSupernova

This channel deserves 1 million subscribers. Thank you for making these Joeri! My word, an entire hour of inflation-talk. Better get the popcorn!

Luxegr

Mate...you make arguably the most exciting content around these economic related topics. I'm already anticipating your next one.

tigs

Thank you so much for making non-sensationalized economics videoss that seriously teach people to consider multiple perspectives.

Your breaking the mould here and you should never stop mate

raplords

Wow. I can't believe how high quality this video is, and for free! Those animations and b-rolls with a quality researched script... You kick ass Joeri

trsh

Excellent video, I agree with all of your points. I have teachers from my master's in econ, who are literally obsessed with inflation and cant think of anything else. Sadly we still use the quantity theory of money, especially in undergraduate programs. They all support that the tapering should have already begun in last October-November. Maybe since in Europe we're used to having an inflation of 2% for so many years, now that it's around 5% they all think its the end of the world. And most of them seem to support that it's clearly a demand pull inflation, its demand's fault, not at all supply problems. And it's such a nuisance to try and argue with them since they don't accept any other explanation.

It was nice seeing Kalecki being mentioned, hopefully more people read his works.
Excited for the exchange rate video in the future, as well. Loved the collaboration.

alex_

As a fellow economist, this was great. Very well made. Hopefully it will go viral (sadly dont think so, its more then 30 sec long after all), this needs to be show in schools or similar since way to many really do not understand the basics when it comes to inflation

GreenLarsen

The more I learn about economics, the more I get the feeling that no one knows what is happening. Which is kinda funny but also super scary

ДимитърИванов-еъ

It feels like this guy cares about the careful and considerate dissemination of pertinent information more than clicks.

Curt-zehl

I really appreciate your academic who is talking to an interested general public that has some background knowledge vibe/format.
I hope that you stick with your academic work and job because it allows you to keep this channel boring/non-spectacular, I really appreciate how the fact you don’t seem to be interested in making a main career out of YouTube or gathering a huge audience, seems to be letting you keep the absolute information content and density high.

MrCalls

I think there's an important point about the labor market that's a bit subtle. If you look at the labour force participation rate (at least in the US) it's dropped radically and consistently since 2008. Now, one could attribute this to a wealthier society in which fewer people need to work, but there's more going on here. The unemployment numbers have behaved quite strangely since around 2008, much slower on the way down than they used to be. This is because there's a much larger "dark pool" of non-participating labour, ready to be tapped, but unable to get jobs, that doesn't jobseek (and therefore doesn't show up in the unemployment numbers) unless the labour market is exceptionably favorable.

So, what's the conclusion here? I think that we need to take drops in unemployment much more seriously when it happens in the 3.5-5% range, because they represent inflows (well, typically decreased net outflows) into the labour market as well.

I'm also a bit skeptical of the "early retirement" narrative for this reason. I'm sure plenty of people are reconsidering their relationship with work, but there's a big difference between leaving the labor force to enjoy your extended golden years vs leaving the labor market to enjoy your extended stay at the local drug den. The situations under which each of people in these circumstances return to the market are rather different.

toatoa

This is by far the best YouTube analysis of the current bout of inflation I've seen. I especially appreciate that you covered under-reported unemployment and rising wages. I think these factors don't come up enough in the inflation conversation. You also made an excellent point on inflation being driven in part by higher price stickiness in services than goods. This hadn't occurred to me and makes intuitive sense.

Thanks for all your hard work, Joeri! Your channel just keeps getting better and better. 🙂

iwasjason