The idea that this causes 'hoarding' is highly questionable. It can cause hoarding. It's not a given. But it can get into a downward spiral. Does this cause p

The idea that this causes 'hoarding' is highly questionable. It can cause hoarding. It's not a given. But it can get into a downward spiral. Does this cause people to hold onto their money instead of buying computers, tvs, and iphones? Of course not. Are you sure? No one would argue that all people would stop buying all consumer electronics, the question is: what would sales be like with stable prices? I don't know how to answer it but I don't know how you can say for sure that sales are not lower than they would be with stable prices. Or rather, I am sure it is possible to construct models to try to understand the relation but I am doubtful that you have done so or have a particular model in mind. Please correct me if I am wrong. The difference with a stable currency supply is savers and fixed income earners wouldn't have their purchasing power sucked away from them year after year--on the contrary, they'd become continually wealthier as the economy grows around them. Generally inflation is priced into interest rates. If you look at countries with much higher inflation they tend to have much higher basic interest rates. Krugman's arguments in the post are pretty brief, he's just stating his opinion and not conducting a thorough examination. Likewise, I don't find your arguments very persuasive but that doesn't mean that you are wrong and he is right.