5 ms·

You don't want economics where there is no inflation. It would not be nice.

• huherto 7y ago
  It is not the 2%-3% inflation, which is healthy. It is the stagnation of wages.
  • boutad 7y ago
    Imagine your wages stayed the same or grew but everything else kept decreasing in prices. This was the norm in the United States before the founding of the Federal Reserve.
    • eru 7y ago
      The US is a pretty bad example. They always had very screwed up monetary policy. Pick Canada or Scotland or Australia as the shining beacon. See https://www.alt-m.org/2015/07/29/there-was-no-place-like-canada/ https://www.alt-m.org/2015/07/29/there-was-no-place-like-can...
• eru 7y ago
  That's a common misconception. What's not nice is collapsing total spending (equal to collapsing nominal GDP). In practice, a collapse in total spending often comes with a depression of the price level. As long as nominal GDP is stable (or alternatively, total nominal wages), prices can drop all they want. We see that eg in the computer sector. Total spending on computers increases, while prices drop thanks to better technology and greater productivity. See eg https://mises.org/library/less-zero-case-falling-price-level-growing-economy-0 https://mises.org/library/less-zero-case-falling-price-level... for some more background.
• dangerface 7y ago
  Before 1970 the manufactured inflation we have today was not a thing. For most of human history economics have worked without it.