Courtesy of Mish.
Bad theories never die.
For example, please recall the Phillips Curve economic theory states that decreased unemployment correlates with higher rates of inflation.
Unemployment has plunged, but wage growth and inflation (the latter as measured by the Fed) are nowhere in sight.
Instead of tossing absurd theories onto the ash heap, economists and writers repackage the same bad ideas in similar ways.
Here’s the newly revised theory courtesy of the Wall Street Journal: Anemic Wage Growth Restraining Economy.
“Years of solid job gains are failing to produce a breakout in wages, suppressing the spark needed for a sustained pickup in economic growth,” says Wall Street Journal writer Eric Morath.
Let’s put that theory to a simple test.
Wage Growth Minus CPI Growth
