Mathematical Proof that Academics are Idiots
Facts: Paul Krugman, a Nobel prize winner, has repeatedly claimed the following: "And huge emphasis on monetary aggregates, which have been totally useless at predicting inflation (Milton Friedman got this repeatedly wrong in the 1980s)" Krugman used the chart below as validation. The red curve shows the rate of change of inflation and the blue curve shows the rate of change of M1. The amount of inflation is the area under the red curve; The total M1 is the area under the blue curve; this is high school mathematics. The total inflation (over a long period of time), aligns quite well with the total M1 (over a long period of time); hence, this chart is not evidence that inflation is not correlated with M1; indeed, the chart indicates the opposite. The chart does indicate that inflation is not instantaneously related to M1; but to be honest, no one cares if money printed today causes hyper-inflation tomorrow, or in two years time. I suggest that these series of po