Got a tricky question? Receive an answer from students like you! Try us!

Why We Need a Goal of Zero Inflation - Essay Example

Only on StudentShare
Pages 2 (502 words)


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)…

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. ...
Download paper
Not exactly what you need?

Related Essays

The Nature of Theory Why we need to be able to think in theoretical terms
Most of the time, people think within the box suggesting the idea that they tend to understand matters simply based upon the utilization of their sight and their hearing sense. It could be noticed though that simply thinking within this box limits the capability of people to see only what they can and not that of those that they could perceive.…
6 pages (1506 words)
Inflation targeting
2% in the U.K. nd 2.5% in Nrwy. (Mishkin, Eakins, 2006) The difference between these frms des nt seem t mtter in prctice: centrl bnk with trget rnge seems t im fr the middle f the rnge, nd the edges f the rnge re nrmlly interpreted s "sft edges," in the sense tht they d nt trigger discrete plicy chnges nd being just utside the rnge is nt cnsidered much different frm being just inside.…
7 pages (1757 words)
Goal Seek and Solver
The miles per hour are constant, and Excel is goal seeking to determine the number of miles traveled.…
4 pages (1004 words)
Goal Setting
I have some very lofty goals that I know are challenging but I am on the right path. Currently I am working towards becoming a Clinical Physcologist. I am attending the University of Wisconsin-Madison as a freshman. I am highly ambitious as I will be completing 26 credits for my 1st semester (normally coursloads run from 15-20 credits). I have sustained a high level of achievement throughout all of my academic career, my many awards and honors include Honor roll (200-2006), Who's Who Among American High School Students, High School student achievement award (2004 and 2006), Student of the…