"Sticky wages" is typical macroeconomics pablum. Imprecisely defined, completely unfalsifiable, used when it supports an argument and ignored when it doesn't. Contributes absolutely nothing to true understanding of the economy.
Should be obvious from the discussion, especially for someone who “knows quite a bit” about the subject.
> Hi yes I know quite a bit about sticky wages and inflation.
Then why did you ask me for a source for a statement that is well understood among anyone who has studied the subject? Krugman’s statements to this effect are so well-known as to have been written about in other publications.
Back to the original statement: Is it that hard to say “we think wages among the working class are too high so the central bank depreciates the currency”? well is it?
You are purposefully ignoring the normal explanation, which is this: because wages are sticky, firms that need to cut costs in a recession are more likely to lay off people than they are to give pay cuts. Inflation helps to weaken that rigidity so that job losses are not as large. Maybe you know that.
You claim that central banks depreciate the currency because they "think wages among the working class are too high." But rhetorically, you are doing more than just referring to the explanation I gave above. You are implying that central banks "think" working class wages are too high, and want to lower them to hurt working class people.
Which is the opposite of the standard explanation - the purpose of inflation in that instance is to implicitly reduce the downward rigidity of wages so that employment does not contract as much in a downturn.
Presumably you, champion of the working class, would rather more people be unemployed?
> because wages are sticky, firms that need to cut costs in a recession are more likely to lay off people than they are to give pay cuts. Inflation helps to weaken that rigidity so that job losses are not as large.
How fortunate for the capitalist that he can retain his entire workforce by paying them less and they are not even likely to notice.
> You claim that central banks depreciate the currency because they "think wages among the working class are too high." But rhetorically, you are doing more than just referring to the explanation I gave above. You are implying that central banks "think" working class wages are too high, and want to lower them to hurt working class people.
Banks wanting to hurt working class people is an unnecessary hypothesis. they merely want to help their friends who own businesses and would like to pay less in real terms for their workforce.
> the purpose of inflation in that instance is to implicitly reduce the downward rigidity of wages so that employment does not contract as much in a downturn.
give workers a stealth way cut so the business can afford to keep all of them, yeah, I get it.
> Presumably you, champion of the working class, would rather more people be unemployed?
I want them to be unemployed the same way you want them to be tricked into making less real money.
