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Is a Little Bit of Inflation OK?

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journal contribution
posted on 15.04.2000 by Allan Meltzer

The goal should be zero inflation, on average, to protect the purchasing power of money. Uncertainty about inflation raises both real and nominal interest rates, hinders long-term investment and planning for retirement. Maintaining zero inflation forces business to control costs, thereby encouraging productivity improvements. Uncertainty about future purchasing power is particularly costly for the timid, cautious, and poorly informed.

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15/04/2000

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