🚀 go-pugleaf

In article <1993Jan24.163027.3144@athena.mit.edu> cmk@athena.mit.edu (Charles M Kozierok) writes:
>In article <1993Jan23.182032.28056@csi.uottawa.ca> cbbrowne@csi.uottawa.ca (Christopher Browne) writes:
>>In article <1993Jan23.165450.9818@athena.mit.edu> cmk@athena.mit.edu (Charles M Kozierok) writes:
>>>an illusion which creates a deceptive situation deserves as much
>>>of the blame (at least) as those it fools. even if most of the populace
>>>should know better, they don't -- as such, that is one drawback of
>>>inflation.
>>
>>After the fairly extensive amount of inflation which people have seen
>>particularly over the past 100 years, it is NOT likely that there are
>>many people who are unaware of the presence of inflation.
>>
>>It's difficult to decieve people who ARE aware that inflation exists.
>
>i disagree, though i don't think either of us can prove it. when inflation
>pushes both wages and prices higher, i think most people only see
>inflation as pushing prices higher, and that they somehow "deserve" the
>full amount of their wage increase.

It's well nigh unto impossible to analyze your assertion, as it does
not represent the "rational expectations" that economics normally
assumes.  Assuming "irrational expectations" allows you to assume
essentially anything that you want, and makes it terribly difficult to
come to ANY conclusions.

The fact that some individuals may act in ignorance does not
necessarily change the aggregate behaviour, which amounts to
"awareness of inflation."  Those individuals that make decisions based
on a false perception of reality will make suboptimal decisions.
Since they are a minority, they don't necessarily have any tremendous
impact on the macro-economy.

For instance, the fact that some people buy lottery tickets based on
the fallacious assumption that they're likely to "win" hasn't resulted
in ALL money going into lotteries.  Lotteries remain a relatively
small influence in the economy as a whole.

-- 
Christopher Browne                |     PGP 2.0 key available
cbbrowne@csi.uottawa.ca           |======================================
University of Ottawa              | Genius may have its limitations, but
Master of System Science Program  | stupidity is not thus handicapped.