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Mild inflation promotes growth by encouraging money to be put to use rather than sit idly in savings. Banks make more aggressive loans to keep yields high.
by codex 13y ago
Mild inflation promotes growth by encouraging money to be put to use rather than sit idly in savings. Banks make more aggressive loans to keep yields high.
- jayfuerstenberg 13y agoInflation can take a long time to trickle out from the major banks and lending institutions and down to businesses and finally down to average consumers. What no economist can tell you though is how those irrational consumers will truly behave. If you throw more money at me, I'm not going to spend more money, I'm probably hold on to it and invest it in other assets. I guess I'm breaking the system.