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Inflation is a process, not an event - Part I: Three inflation fallacies
Inflation is a process, not an event - Part I: Three inflation fallacies
- What have we forgotten the nature of inflation since the 1970s?
- Where is the U.S. economy in the transition from low to higher inflation?
Monetary authorities and economists focus on inflation expectations because inflation expectations have a way of becoming reality over time. Inflation expectations, after falling hard in 2008, have been steadily rising since early 2009, and actual inflation has tracked expectations, with a time lag, as usual. Recently, however, inflation and inflation expectations have started to dip again. Is it time for the Fed to hit the deflation spiral panic button? (more...)
Inflation is a process, not an event - Part I: Three inflation fallacies
Inflation is a process, not an event - Part I: Three inflation fallacies
- What have we forgotten the nature of inflation since the 1970s?
- Where is the U.S. economy in the transition from low to higher inflation?
Monetary authorities and economists focus on inflation expectations because inflation expectations have a way of becoming reality over time. Inflation expectations, after falling hard in 2008, have been steadily rising since early 2009, and actual inflation has tracked expectations, with a time lag, as usual. Recently, however, inflation and inflation expectations have started to dip again. Is it time for the Fed to hit the deflation spiral panic button? (more...)