Keynesian economists claim that deflation is as bad or worse than inflation. But deflation not only reverses inflation's bad effects but also allows new wealth creation.
A serious political discussion at the federal level would center on structural problems of war and peace, debt and the dollar, and entitlements. But America in 2022 is a deeply unserious country.
The Fed's predictable response to inflation is based on erroneous economic thinking common with Keynesians. Only a free-market approach can reduce inflation and restore true market interest rates.
The common view of inflation is that it is defined as a general increase in prices. Actually, inflation is expansion of the money supply that results in price increases.
Pakistan, like so many other countries, is seeing inflation close to spiraling out of control. As for finding causes, monetary authorities should look in the mirror.
The world seems to be on fire, and much of the trouble comes from the efforts of central banks to suppress interest rates. No one understands that problem better than British historian Edward Chancellor.
