Wednesday, May 20, 2009

Is inflation the solution?

Interview of William Poole and Brandeis' Catherine Mann on why a 6% inflation, as advocated by some economists, will do more harm than good.

Adding to the discussion, I think moving to a higher inflation 'target' may also destroy the Fed's hard-won reputation against inflation in Volcker era.

Monetizing debt looks seductive, but I hope the Fed will not go there.