Why We Need a Goal of Zero Inflation - Essay Example

Only on StudentShare

Extract of sample
Why We Need a Goal of Zero Inflation

Keleher reports that, "This objective has been endorsed not only by many of the world's most esteemed monetary economists but also by many Federal Reserve officials". A zero inflation rate will not impact the unemployment rate as critics contend. It will, however, stabilize the economy, and benefit the average worker.
Though there is some debate about the definition of zero inflation, almost all economists agree that high inflation rates have a negative impact on the economy. When the inflation rate reaches double digits, economies will experience slower rates of growth. The unpredictable future of inflation rates reduces investment, spending, and creates a climate ripe for poor planning. Future prices and uncertainty about future income affects everything from automobiles to the real estate market. There is no doubt that a goal of zero inflation is desirable in today's instantaneous, global economy.
As much as it is desirable for the corporate economy, it is even more so for the individual. Retirees on fixed incomes face an uncertain future with high inflation. For the average worker, an inflationary rise in wages will lag the increase in prices, which will place them permanently behind the inflation curve. The complexities of evaluating personal financial decisions in an inflationary market leaves the consumer open to exploitation. ...Show more

Summary

Milton Fiedman once said that with the introduction of fiat currency, there was no longer any method of standardizing and stabilizing the price system, and no standard of value exists. It is incumbent upon the central bankers to provide that stability (Keleher)…
Author : ybartell
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Why We Need a Goal of Zero Inflation"
with a personal 20% discount.
Grab the best paper

Related Essays

The Nature of Theory Why we need to be able to think in theoretical terms
Basically, theories have lead to the different advancements that the world of human civilizations began to enjoy from then until now. However, it could be noticed how much only a few people are able to provide such theoretical understanding of such matters.
6 pages (1500 words) Assignment
Inflation targeting
In the following paper I will discuss inflation targeting as one of central bank's monteray policiy's to regulate stability in the country. First, I will introduce the notion of inflation targeting, then I will look at the literature review of inflation targeting as well as speak aboutunfavorable shocks that make influence the policy, ultimately I will drow on the conlclusion as wether inflation targeting has proved to be a successful strategy in many industrialized countries or that it was only due to the fact that central banks have not been hit by strong unfavorable shocks.
7 pages (1750 words) Essay
Goal Seek and Solver
For example, using the earlier bicycle example, at 15 miles an hour, one can adjust the number of minutes to 45 to determine how many miles one would travel at that rate (11.25 miles). In this case, the number of minutes is expressed as a formula (number of miles multiplied by the result of dividing 60 minutes by the number of miles per hour).
4 pages (1000 words) Essay
Goal Setting
They don't actually need to show up to class but should because it will helo them succeed. This freedom is much anticipated but without some organization can prove to be a disaster. I have not fallen trap to this but have kept myself on my choosen path. I have a very ambition education goal and know that with my attitude and perseverance I will be a great success.
2 pages (500 words) Personal Statement
Inflation
Businesses are reluctant to make investments during periods of volatile inflation. Countries suffer from a tax rate that is based on pre-inflationary periods that are less than the current value. It also causes exports to go down as prices go up resulting in a trading deficit.
2 pages (500 words) Essay
A contract to enter into a contract is not enforceable. when contract is subject to Negotiation, it is too uncertain to have a binding force.
In particular this may also occur in cases where the terms agreed to between the parties and spelt out in an agreement prior to contract are inominate or of an uncertain nature. In such
8 pages (2000 words) Essay
Should the central bank aim for zero inflation? (Economics)
Many economists now believe that central banks should for achieving an inflation target of zero as it as this rate that the monetary policy can be optimized to gain best advantage out of it however some argue that targeting the zero
3 pages (750 words) Essay
Inflation
Whole world is going through a phase of economic recession. Despite much progress in the development of sound marketing strategies,
6 pages (1500 words) Essay
Find out how much would it cost
to get a custom paper written by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT