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Inflation Is the Way to Pay Off Coronavirus Debt

Raising the long-term inflation target from the current 2% to a still-modest 4% would substantially increase the rate at which debt effectively vanishes.

A final concern is whether the Fed could actually hit the 4% target. The Bank of Japan has been trying mightily to raise inflation for years with only modest success. If businesses don’t raise their prices in response to the Fed’s new target, inflation just won’t happen.

Noah Smith Bloomberg 7 maj 2020


Englund: Without inflation, how could the debts ever be paid back?

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