Inflation/deflation

A group of central bankers and economists who lived around the 1970s realized that there is a greater risk from rapid inflation and that actions ought to be undertaken to cease it before it spirals beyond control. As a matter of fact, the threat nowadays arises from inflation that is excessively low, or from deflation. A lot of the globe’s economic setbacks would be lessened if we could obtain more inflation than we have currently.

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Provided that deflation is a likelihood, the Fed would be well instructed to clarify, repeatedly, why inflation that is excessively low is similarly harmful to the economy. The message that high inflation is a threat is well understood by voters and politicians.

References
Business Day. (2014, October 31). Inflation? Deflation Is New Risk. The New York Times [New York], p. B1.

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