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

|By:, SA News Editor

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.