4 ms·

I don't personally think low inflation, or even deflation, are so bad, but that idea is at the heart of central bank policy frameworks.

• Ericson2314 5y ago
  I would prefer other ways than inflation to deal with debt accumulation and miserly unproductively money hoarding, such as demurrage. But the 19th century did not do those, so I thus find myself agreeing with the Central Bank. Also, since its hard to imagine technology process with out debt in a market economy, we have have an interesting interaction here.
  • jbay808 5y ago
    I'm not quite sure in what sense you're using the 19th century as a reference here. As an example of a time of rapid technological change? As a time before central bank inflation targeting?
    • imtringued 5y ago
      He means the 20th century. Governments thought they could solve the debt problem with austerity but people simply responded to the lower interest rates by literally keeping their money under the mattress. This is still true today. Interest is at zero, people keep their money in bank accounts of banks who are so heavily overleveraged vs their demand deposits that they are unable to take the risk of lending. Money is stuck and has to be replenished by more borrowing i.e. QE asset purchases give banks more reserve assets and let them pretend their balance sheet is clean.