It may be time to change this blog's name.
I did a little searching around, and it turns out that Krugman and I are in near total agreement on the MV=PY issue. Its amazing. He and I both believe that MV=PY is nothing more than a tautology, implying no causal relationship, Y is real (i.e. tangible) thing that can't be manipulated, and that monetary policy can't in a "liquidity trap" (a meaningless phrase) increase Y. I don't know if I'm happy or terrified by this development, but its interesting.
http://krugman.blogs.nytimes.com/2009/11/06/nominally-misguided-wonkish/
We unfortunately disagree on how "sticky" P is. Krugman bizarrely ignores the surge in the prices of commodities and food as not "core" inflation. His argument is that these items are volatile, so they should be excluded from measures on inflation. I would argue that excluding essential items like food and gas from a measure of inflation renders it meaningless. I would further argue that volatile, heavily traded goods are the best measures of inflation, as they are traded in the most sensitive markets.
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