Exact(33)
Hayek believed the central bank should aim to stabilise nominal incomes.
Imagine that incomes rose much more slowly, so that real inflation-adjusted incomes fell even though nominal incomes rose.
They doubled the minimum wage, increased public-sector wages and pushed up nominal incomes by almost 30% in two years.
It also means that nominal incomes grow more slowly than they would if prices were rising faster.
Nominal incomes have been rising at some 14% a year even in the bottom tenth of urban households.
Meanwhile other variables like nominal output, or nominal incomes, or unemployment) were changing in very worrying ways.
Similar(27)
So that should mean that nominal income growth is low.
But does money supply directly boost nominal income, or does nominal income affect velocity and the demand for money?
"In these figures today we see the eighth consecutive decline in nominal income.
First, debt is easier to service if your nominal income is rising, but nominal income growth has been very sluggish in Japan.
Nominal income in turn is the product of real output and prices.
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Justyna Jupowicz-Kozak
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