April 15, 2022
Richard Curtin wrote about inflationary psychology in Barron’s
Richard Curtin wrote a commentary for Barron’s describing the upward spiral of prices and wages, a situation called “inflationary psychology.”
Prices and wages will continue to spiral upward until the cumulative erosion in inflation-adjusted incomes causes the economy to collapse in recession. It is like the children’s game of musical chairs: Everyone knows the game will end, but they feel compelled to keep racing around the circle at an ever-faster pace hoping their forced exit will leave them in the best possible position—even if it still means an inflation-adjusted loss.