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What would it take to have "natural pricing"? Short of radical proposals like going back to the gold standard or switching to crypto, what way could the Fed op
by ponow 4y ago
What would it take to have "natural pricing"? Short of radical proposals like going back to the gold standard or switching to crypto, what way could the Fed operate that would allow "natural pricing"? What if the Fed targeted 0% inflation, instead of 2%? I realize that inflation has many definitions, but I got the impression that they're reasonably correlated over long periods of time. With a zero-percent inflation target, what consequences would we expect? I think we would need higher interest rates on average, for starters. This would temper the housing problem. It would also reduce total debt, and total debt increases are associated with financial instability.
- IG_Semmelweiss 4y agoI dont think parent was making a confused point. Natural pricing simply means whatever the market was prior to COVID , with all its imperfection, including the central banks' 2% inflation target