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.
> 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.