Saturday, December 10, 2011

Why Inflation Is Better Than Deflation During Depression

Krugman argues that inflation is not a good thing when an economy is operating at full-employment. On the other hand it was a good thing during the last depression, which is similar to where we are today. The countries that devalued their currencies by going off of the gold standard ddi better than those that held to the gold standard. Inflation is better during a depression than deflation.

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