But if the European Central Bank significantly loosens the currency to bail out these countries, it will create
serious inflation problems in countries like Germany and others with more skilled labor forces and reasonable deficits.
Not exact matches
In a good economy, gradual
inflation is considered a good thing, but in tougher economic times, too much
inflation is a
serious problem.
Last point: as I stress in the WaPo piece, the
inflation target is too low — at 2 %, it invokes possible zero - lower - bound
problems the next time we hit a downturn, and especially with a... um... difficult Congress (meaning adequate countercyclical fiscal policy may well not be forthcoming), that's a really
serious problem.
Had economists been told such monetary policies lay ahead, moreover, they would have confidently predicted that
inflation would become a
serious problem — and would have been shocked to find out that across the United States, Europe, and Japan, it has generally remained well below two percent.
With
inflation and
inflation expectations below target and declining, there would be little case for preemption even if
inflation above target was a
serious problem.