Correction of Brad DeLong

He is wrong to suggest that I am calling for deflation.  He draws his conclusion by citing advice which is a thought experiment and which I call "patently absurd" elsewhere in the post.  I also left this comment on his blog:

I am not calling for deflation, this is simply a misinterpretation of what I wrote.  Further an unemployed person with debt is even worse off than an employed person at a lower wage.  *And* even our fairly wimpy Fed is not going to allow a high rate of deflation and thus a big real increase in the debt burden.

Here is an earlier column of mine, entitled "How a Little Inflation Could Help a Lot."  While I am increasingly unsure how much good such inflation would do, I have been arguing for a year that it is worth trying and for instance just yesterday I wrote in the Brad-cited post "I favor a more expansionary monetary policy".


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