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I Understand Where Martin Feldstein Starts: I Do Not Understand Where He Ends Up: Focus - Washington Center for Equitable Growth
Vir illustris Martin Feldstein starts by saying: downward nominal price stickiness is such a thing that we do not have to worry about deflationary spirals in consumer prices. I agree. But I do not understand where his argument ends up:
Martin Feldstein: The Deflation Bogeyman: “The world’s major central banks are currently obsessed with… raising their national inflation rates to… 2% per year….
…But is this a real problem?… Fortunately, we have relatively little experience with deflation to test the downward-spiral theory…