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The argument I’ve read is that deflationary spirals are much more difficult for governments to deal with than high inflation.

• kneebonian 4y ago
  That may have made sense before fiat currency, but I literally can't think of what could be simpler than print more money* The real problem is economics isn't a science, it is more akin to reading pig entrails or sheep's bones than anything that is scientific. * I know it's not actually printing money, it's changing the reserve rate, playing with interest rates etc.
  • tablespoon 4y ago
    >> The argument I’ve read is that deflationary spirals are much more difficult for governments to deal with than high inflation. > That may have made sense before fiat currency, but I literally can't think of what could be simpler than print more money If it were actually that simple, I'm sure governments would act differently (especially since helicopter money is in no way a novel idea). Since they don't, it's almost certainly more complex.
  • HDThoreaun 4y ago
    https://en.wikipedia.org/wiki/Liquidity_trap https://en.wikipedia.org/wiki/Liquidity_trap Macro, and especially inflation is largely about expectations. Central banks work very hard to maintain trust. Empirical evidence has shown that deflationary spirals can be difficult to escape.