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Thursday, April 26, 2012

Yes, Ben, Yes It Does

Federal Reserve Chairman Ben Bernanke asked a rhetorical question at a press conference yesterday for which I think the answer most Americans would give may be quite different from the one he thinks we think it is: “Does it make sense to actively seek a higher inflation rate in order to achieve a slightly increased pace of reduction in the unemployment rate?” Given that unemployment is very much a crisis for millions of Americans, and inflation very much is not, then it makes no sense to pretend the answer to this question would be no, especially not an unhesitant no, especially when there are good reasons to believe that allowing a higher inflation rate might yield more than a "slight" improvement in the nation's employment picture.

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