Quote:
Originally Posted by SebC
If you had a fixed money supply, as technology/capital makes productivity go up, the nominal price of goods goes down, which means people are deterred from spending (since everything gets cheaper the longer you wait to buy it), and then the economy crashes.
Having the ability to print money and control interest rates to control inflation but setting a target rate of 0, you run the risk that you'll miss and go into deflation... and again, that's bad.
Small, controlled inflation is the way to go. You can beat inflation by investing.
|
Are complaining about deflation in the technology (computers, phones) industry? I hope you also feel bad for making tech industry crash by buying the same device today cheaper than it cost few months ago, but surprise surprise it seems to be doing just fine?