If you are among those calling Ball an idiot simply because he said a 4% inflation rate for the developed world is optimal, well then YOU are stupid.
Go search in the literature the terrible costs of a 4% inflation rate...you wont find. There is no such evidence out there, sorry.
The benefits are clear: from the Fisher equation, nominal interest rates rise with inflation one-to-one, which allows countries to avoid the zero bound if a strong recession kicks in. In sum, there is more room for traditional monetary policy to deal with the recessionary scenario. Oh, it is not unlikely, it is not a one in 100 years event!
In the last 70 years, it may be, but that means nothing because it is only recently that countries have been focusing on the 2% target. And in two and a half decades we reached the zero bound twice, in japan 20 years ago, and in many countries now.
Oh, Antoninho, sometimes I don´t know if you are naive or ironic...nasty boy!
ResponderExcluirImposto inflacionário e maior volatilidade dos retornos não seriam custos que aumentam com a inflação?
ResponderExcluirOutra dúvida meio relacionada, sabe como mensurar o impacto na atividade e na inflação de um QE? Tem como fazer um VAR? Qual seria a variável do instrumento da pol monetaria?
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