I won't pretend to be an expert on the matter, but I'm not very convinced by your argument.
> [...] wages do not increase as a result of high inflation
Not in the short term, sure. But if the cause of the inflation isn't something permanent, labour is still (somewhat) subject to the same market equilibrium (in real terms) as it was before the inflation. There are some major caveats here (e.g. wage stickiness), but we're talking long-term.
> which is exactly what we are witnessing now
I don't disagree, but again this isn't long-term. I assume you wouldn't expect these effects to last for the rest of eternity (assuming inflation returned to 2% and stayed there)?
I'm not sure what market equilibrium you're referring to. If things always balanced out in the long-term, our economic situation would resemble the 1950's or 60's, where a single-income household could comfortably afford a suburban house and raise kids. Instead, we have people living under their parents' roof until 30 or longer, enormous college debt loads, majority of families relying on two incomes (and often, one or both parents moonlighting at a second job), housing costs taking a larger slice of total incomes than ever before, married couples refraining from having kids as an economic decision, more people than ever relying on some form of government subsidy. None of these factors would be growing if some long-term equilibrium existed, because at some point, we'd be reverting to the mean. Instead, society's lifestyles have slowly shifted in response to the fact that, over the long-term, producers have become increasingly effective at extracting a larger and larger share of consumers' incomes, and ultimately, realized and potential wealth.
But surely you'd agree that most of those things are ultimately caused by external factors, not just some sort of long-term build up from inflation over the years?
> society's lifestyles have slowly shifted in response to the fact that, over the long-term, producers have become increasingly effective at extracting a larger and larger share of consumers' incomes, and ultimately, realized and potential wealth.
It sounds like we basically agree (even if I'd describe it a bit differently)?
Edit: I guess what I'm trying to get at is that there are lots of different things that can cause inflation, and not all of them follow your example of "that excess 6% is permanently embedded in prices in all future years" in real terms.
by "producers", I am not referring to wage-earning employees, but (primarily) corporations and business owners.
> there are lots of different things that can cause inflation
yes, true. but you've offered no support for your original claim that "wages catch up," or that the negative effects of brief periods of excess inflation are not long-lasting.
Yes, that's how I interpreted it - no disagreement here.
> "wages catch up,"
I probably should have clarified my wording a bit. I think it's clear that _total_ nominal earnings will increase [1] (because where else will the extra 6% of revenue go?), so the only question is how well distributed those earnings will be. In the short term, perhaps pretty poorly. In the long term, maybe a bit better - but that's a much more complicated subject and beyond what my original comment was trying to imply.
I didn't intend to imply that there are _no_ lasting effects from excess inflation, though I can see how it'd come across that way.
[1] again, assuming the inflation was caused by increased demand, not a supply shock.
> [...] wages do not increase as a result of high inflation
Not in the short term, sure. But if the cause of the inflation isn't something permanent, labour is still (somewhat) subject to the same market equilibrium (in real terms) as it was before the inflation. There are some major caveats here (e.g. wage stickiness), but we're talking long-term.
> which is exactly what we are witnessing now
I don't disagree, but again this isn't long-term. I assume you wouldn't expect these effects to last for the rest of eternity (assuming inflation returned to 2% and stayed there)?