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A healthy dose of inflation may be the answer for a stalling economy when traditional policy...

A healthy dose of inflation may be the answer for a stalling economy when traditional policy tools are exhausted. According to new research by the NY Fed, the "benefits of anticipated higher inflation can be large," and as such, moving the official inflation target may spur economic activity. The notion of tolerating higher prices has come under increased scrutiny lately with some lawmakers proposing the abolition of the Fed's dual mandate. 
Comments (11)
  • Only the wealthy use gas and food, so raise the prices high!
    28 Mar 2013, 05:10 PM Reply Like
  • Another nail in the coffin of the middle class.
    28 Mar 2013, 05:11 PM Reply Like
  • I think they stopped eating those iPads and are now smoking them, instead. What kind of bizzaro country has this turned into?
    28 Mar 2013, 05:38 PM Reply Like
  • Let's see.....the Japanese have been seeking the Holy Grail of inflation for how long now???? Must not be as easy as they think it is to create.
    28 Mar 2013, 06:19 PM Reply Like
  • For about three months? And frankly they are not doing that badly after they embraced inflation.
    28 Mar 2013, 06:54 PM Reply Like
  • Marlowe...Japan and inflation...Japan has been unsuccessfully trying to produce inflation for over 15 years....
    28 Mar 2013, 07:52 PM Reply Like
  • The FED does not need to raise their inflation target, but they should take the target they have seriously.

     

    Regarding the dual mandate, there will always be a southern republican senator that wants to remove the Fed's duty to keep full employment. But they don't really need to bother. The FED has never taken that particular part of their mandate very seriously.
    28 Mar 2013, 07:02 PM Reply Like
  • That's because the FED can influence a reduction in employment but they cannot influence an increase in employment - particularly not in a balance sheet recession.
    29 Mar 2013, 12:05 AM Reply Like
  • A Healthy dose?
    28 Mar 2013, 08:17 PM Reply Like
  • bd4uandu - a healthy dose => than 44 ounces per cup.
    29 Mar 2013, 12:06 AM Reply Like
  • Decaf please..
    29 Mar 2013, 05:16 AM Reply Like
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