Larry Summers Doesn’t See How Wage Inflation Can Fall Without a Recession
2022.10.17 17:37
© Bloomberg. Larry Summers, former U.S. Treasury secretary, listens during the New Work Summit in Half Moon Bay, California, U.S., on Tuesday, Feb. 26, 2019. The event gathers powerful leaders to assess the opportunities and risks that are now emerging as artificial intelligence accelerates its transformation across industries.
(Bloomberg) — Former Treasury Secretary Larry Summers responded to a New York Times opinion piece by Paul Krugman on inflation, saying “team transitory” arguments in favor of a dovish Fed policy are “tendentious & selective.”
On the specific issue of wage inflation, Summers doesn’t see how it will come down significantly without “a meaningful recession.”
Summers says Krugman, who discusses the impact of rising housing costs and the lag in data on recent inflation figures, would be more convincing had he been discussing it when housing was holding down overall inflation last year.
Larry Summers is a paid contributor to Bloomberg Television.
READ MORE: Summers Sees Stronger US Wage Pressures in Changed Labor Market, Summers Urges Fed to Keep Tightening, Even as ‘Collision’ Looms
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