Thursday, September 10, 2009

Inflation or Deflation?

While Paul Krugman says that large resource gaps have made him worried about deflation, Allan Meltzer says that massive growth in the monetary base has made him worried about inflation.

Charles L. Evans, President and Chief Executive Officer, Federal Reserve Bank of Chicago, thinks “neither a harmful deflationary episode nor a repetition of the Great Inflation (1965-1982) is very likely” and develops an interesting argument leading to that conclusion.

A link to his paper: here .

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