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Why increasing infaltion is not likely to increase employment
Date: 2012-04-07T10:03:54.403
Author: Yves Smith
Editor note: Yves here. I have a mild quibble with part of the argument below, which is based on a study I find badly constructed. Having lived through the 1970s, I can attest that a certain level of inflation does lead people to spend faster to beat rising prices. But my sense it that effect does not kick in until inflation is perceived to be meaningful, say somewhere over 4-5% a year, and I suspect the effect is backwards looking (ie, consumers base their forecasts not on official projections, but on thei
Teaser: Yves here. I have a mild quibble with part of the argument below, which is based on a study I find badly constructed. Having lived through the 1970s, I can attest that a certain level of inflation does lead people to spend faster to beat rising prices. But my sense it that effect does not kick in until inflation is perceived to be meaningful, say somewhere over 4-5% a year, and I suspect the effect is backwards looking (ie, consumers base their forecasts not on official projections, but on thei
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View original artilce: http://www.nakedcapitalism.com/2012/04/dan-kervick-contra-krugman-why-increasing-inflation-is-not-likely-to-increase-employment.html
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