> One can quibble. Food is 14% of EU expenditure, so even a 0.7 percentage point rise in food prices is an 0.1 percentage point rise in general prices, and we leave out food and energy prices from core inflation precisely because they are “transitory.” The whole “climate risk to the financial system” as well as “risk to price stability” faces the fact that almost all of a modern economy is indoor manufacturing and services, that are remarkably impervious to weather. Floods are local.
I’m not trained at all but to accept his argument is to accept that:
- food is 14% of expenses, so the ECB should only devote 14% of its price stabilization to it. The front page of the biggest newspaper in Russia today is about +75% potatoes. Central bankers are allowed to worry about potatoes.
- indoor manufacturing is “almost all” of a modern economy. Not credible: this is maybe 25% in China.
> One can quibble. Food is 14% of EU expenditure, so even a 0.7 percentage point rise in food prices is an 0.1 percentage point rise in general prices, and we leave out food and energy prices from core inflation precisely because they are “transitory.” The whole “climate risk to the financial system” as well as “risk to price stability” faces the fact that almost all of a modern economy is indoor manufacturing and services, that are remarkably impervious to weather. Floods are local.
I’m not trained at all but to accept his argument is to accept that:
- food is 14% of expenses, so the ECB should only devote 14% of its price stabilization to it. The front page of the biggest newspaper in Russia today is about +75% potatoes. Central bankers are allowed to worry about potatoes.
- indoor manufacturing is “almost all” of a modern economy. Not credible: this is maybe 25% in China.