🚀 go-pugleaf

In article <1jngr2INNfq7@darkstar.UCSC.EDU> david@cats.ucsc.edu (David Michael Wright) writes:
>
>In article <1993Jan21.211928.8356@athena.mit.edu> cmk@athena.mit.edu (Charles M Kozierok) writes:
>
>|how is [inflation] good? it is rather simplistic to just look at the increasing
>|price of your house without also considering how the price of everything
>|else is also increasing, and the fact that the bottom tier of house
>|buyers is pushed out of the market.
>
>Unanticipated inflation is, in general, a good thing: if wages are
>sticky it gives you the opportunity to work if the real wage is
>reduced, it makes you economize on money balances so you invest more,
>it reduces debt and thereby makes it easier to invest, it gives a
>signal that the economy is improving (which it may be for the
>reasons above or not) and so boosts consumer confidence. Moderate inflation has
>nearly always been associated with rising output.

i think it also has some very bad points. it is essentially a lie that
clouds the issue of productivity: it leads to workers thinking they
are getting increases due to increased efficiency when they are just keeping
pace. it makes people think things are getting better when they aren't.
it also leads to the nightmare of COLA - which is what leads us down
the road into real trouble.

i don't think inflation is appreciated by those who constantly see
prices rise.

>Of course, high inflation, or too variable an inflation rate, makes it
>impossible to judge the difference between real and nominal prices,
>and so the whole economy can go down the tubes. Anticipating this
>event also is disasterous.

yes, but moderate inflation leads to bad inflation in most cases. it
becomes hard to keep it moderate. 

--
charles