Re: how does economics explain stagflation?


"The Trucker" <mikcob@xxxxxxxxxxx> wrote in message
news:d4hftt0arj@xxxxxxxxxxxxxxxxxxxx
>

>> are there any links on the interrelation of asset markets and the
>> economy?
>>
>> from a layman's view, if asset markets go ballistic, there are two ways
>> out - either everything else becomes expensive to catch up, or the asset
>> markets decline to bring them back to mean. in relative terms the prices
>> are coming back into balance. the only difference in the two is whether
>> the money beceomes worth more or less.
>
> Why do you think there will be a return to lower asset prices and
> better wages?
>
land rent can be seen of as a private tax.

firms which can will relocate to places with lower rent to escape this tax.

it is in the interest of labourers to ensure land rent does not make them
uncompetitive. same applies to other taxes like social security, healthcare
costs etc. as it is most of their income is going to service the mortgage.


.