This basic model is a rough approximation of a complex and constantly evolving mechanism of price determination, and its track record can hardly be considered flawless.1 But it does offer a useful framework for the analysis of inflation, and I am going to use it for that purpose here. I want to emphasize that I am speaking for myself today.
However, the legislation that offered relief to plan sponsors also contributed to the worsening position because it reduced not only the cash contributions made to plans but also the premiums to be paid to the PBGC.