"Indeed, there has long been a strand of thought that says that moderate inflation may be necessary if monetary policy is to be able to fight recessions. Still, advocates of inflation have had to contend with a deep-seated sense that stable prices are always desirable, that to promote inflation is to create perverse and dangerous incentives. This belief in the importance of price stability is not based on standard economic models—on the contrary, the usual textbook theory, when applied to Japan’s unusual circumstances, points directly to inflation as the natural solution. But conventional economic theory and conventional economic wisdom are not always the same thing—a conflict that would become increasingly apparent as one country after another found itself having to make hard choices in the face of financial crisis."
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Academics from the United StatesEssayists from the United StatesColumnists from the United StatesBloggers from the United StatesEconomists from the United States
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Chap. 3 : Japan’s Trap
https://en.wikiquote.org/wiki/Paul_Krugman
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Paul Krugman
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