In keeping with Bryan Caplan on Hillary’s gas-tax holiday and Tyler Cowen on the stimulus (or both of them on placebos), Scott Sumner supports inflation contra the Austrians/gold-bugs if only to distract the public from pushing for Paul Krugman’s solutions (though mostly just because he thinks his proposed policy is a good idea by itself that just happens to avoid the idea trap).
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March 15, 2009 at 5:37 pm
Just to clarify, I have always supported roughly 5% nominal GDP targeting (which implies about 2% inflation) regardless of the macro situation. I do think good policy makes statist quack remedies less appealing, but I would support sound monetary policies even if there was no one out there advocating big government.
March 15, 2009 at 6:59 pm
Yes, monetarists have been advocating mild inflation rates for a while, but it’s the public choice angle I find most interesting. I’ll add a note so as not to mislead readers.