According to David Malpass writing in National Review Online: “There’s too much concern that the U.S. is heading into deflation. U.S. deflation was a policy problem in the late 1990s and caused the global recession of 2001. However, the U.S. departed sharply from Japan’s deflation path in 2001 and we’re now well into a reflation process. In the U.S. — unlike Japan — the currency retraced its course, real interest rates became negative, and tax rates were cut sharply.”
Burt Blumert reminds me that Senator Claghorn, a character on the great Fred Allen Radio Show, rejected the extremes of inflation or deflation, and stood foursquare for “flation.”
