Tag Archive for Inflation

Why Hyper-Inflation Fears are Exaggerated

It’s in vogue for commentators to warn that the booming federal deficit will cause hyperinflation.  However, these commentators rarely acknowledge counterbalancing forces that make this scenario—out of control inflation far beyond run-of-the-mill price increases—unlikely. The first flaw in these alarmist arguments is the presumption that the budget deficit the United States is now running is…

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Why Inflation Can be Good (Now)

It seems crazy.  Don’t save and spend more than you earn, year after year.  Not a good way to run a household or a business.  But running a country?  Maybe it’s not so bad. There’s an economic term here central to understanding the issue:  the “real rate of interest.”  This refers not to the numerical…

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