He further diluted the potion of fear by recognizing deflation as the real danger instead of inflation. He argues that although the Federal Reserve is printing more and more money, yet there are no chances of the rise of inflation because the banks are quite reluctant to send the cash into the market in the present age of economic recession, which sends a discouraging message to the Federal Reserve regarding printing more money. He insists that there is no influence of debts on economy and supports his argument with the practical example of the Bank of Japan which went under the load of huge debts between 1997 and 2003 and yet the consumer prices dropped. Kurgman also referred to the examples of Belgium, Canada and Japan whose debts exceeded their G.D.P.s and yet the governments never inflated the debt to get rid of it. Krugman reiterates that much of the fear of inflation in masses has been developed by the economists who have exaggerated the matters in a biased way.
Present era is an era of economic recession that is widespread all over the world. This recession has largely resulted from the upsets in the global political scenario, and has affected the economy of a vast majority of countries. The biggest victims of the widespread economic recession are the corporate businesses that have shrunk to extinguishment. People are reluctant to invest money in businesses because there is not enough room for growth, given the scarcity of dollars in the market. But the concept of economic recession has been over-exaggerated universally. People are caught in ambiguities and are saving money for the worse times to come. As Krugmen has pointed out in his article, it is evident from the history that economic recession has never been the fundamental cause of inflation, hence people need to realize this fact and overcome their fear of inflation.
To conclude all what has ...
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