That blog's not exactly an improvement to his argument. He tries to dismiss the evidence that [nominal] interest rate changes have a lagged effect on inflation by positing that the interest rate drops are instead caused by a secular "inflation cycle"[1]
Trouble is, there hasn't been any secular "inflation cycle" in the last 30ish years in developed countries that have adopted the policy of managing inflation by downregulating it with interest rate changes. Either you accept that the orthodox policy of announcing that inflation will be managed with interest rate rises has been remarkably successful at containing inflation, or you're scrambling for an alternative explanation for why it appears to have been so successful that doesn't use "inflation cycles". It's certainly telling that he uses hypothetical data to illustrate this theory, and then since the real world time series are so unhelpful to his argument he has to chuck hundreds of data points from different countries, years and interest rate policy regimes into a graph where most of the data points sit near the origin[2] and draw conclusions from the outliers!
I'm going to go out on a limb and suggest that Blair Fix hasn't disproved pretty much the one thing economists who fiercely hate each others' theoretical models and policy recommendations came to consensus on as established fact with a graph which showed exactly the results people familiar with the literature - which Fix clearly isn't - would all expect to see.
As the patient group all went into remission for three decades, it's not even as persuasive a statistical argument as the one for drugs being the cause of terminal illness
[1]ironically, the most plausible explanation for a tendency towards inflation being cyclical as opposed to steady or tending to accelerate would be countercyclical downward pressure on money supply from the Fisher Effect on market credit prices
[2]the key bit being that most of the points sit near the origin because the policy has been so successful...
Trouble is, there hasn't been any secular "inflation cycle" in the last 30ish years in developed countries that have adopted the policy of managing inflation by downregulating it with interest rate changes. Either you accept that the orthodox policy of announcing that inflation will be managed with interest rate rises has been remarkably successful at containing inflation, or you're scrambling for an alternative explanation for why it appears to have been so successful that doesn't use "inflation cycles". It's certainly telling that he uses hypothetical data to illustrate this theory, and then since the real world time series are so unhelpful to his argument he has to chuck hundreds of data points from different countries, years and interest rate policy regimes into a graph where most of the data points sit near the origin[2] and draw conclusions from the outliers!
I'm going to go out on a limb and suggest that Blair Fix hasn't disproved pretty much the one thing economists who fiercely hate each others' theoretical models and policy recommendations came to consensus on as established fact with a graph which showed exactly the results people familiar with the literature - which Fix clearly isn't - would all expect to see.
As the patient group all went into remission for three decades, it's not even as persuasive a statistical argument as the one for drugs being the cause of terminal illness
[1]ironically, the most plausible explanation for a tendency towards inflation being cyclical as opposed to steady or tending to accelerate would be countercyclical downward pressure on money supply from the Fisher Effect on market credit prices
[2]the key bit being that most of the points sit near the origin because the policy has been so successful...