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If your country has a central bank, I promise you the crash is going to be inflationary.
by yossarian1408 5y ago
If your country has a central bank, I promise you the crash is going to be inflationary.
- rory 5y agoI think a more measured stance is that the crash WON'T be (significantly) deflationary. If the crash is "naturally" deflationary, the central banks have now shown a commitment to sustaining inflationary policy to keep inflation at target. But in the case of a "naturally" inflationary recession (stagflation), central banks will be hesitant to ramp up deflationary policy, because regaining employment levels will be a higher priority, and deflationary policy tends to hurt employment.