>Lynn Turgeon writes: >>Passell also concludes that most people
>seem to win as a result of overall deflation just as most people
>seem to lose from overall inflation and therefore tend to go
>along with fighting inflation as a national policy. No wonder
>there is inertia among Japanese policy-makers when it comes to
>reversing deflation.<<
>
>How can Passell say such things?? How can he talk about "most
>people"? Debtors win in (unanticipated) inflations and lose in
>(unanticipated) deflations. Creditors get the flip side, losing
>in (unant) inflations and winning in (unant) deflation. The
>Japanese deflationary hegemony seems to me to be similar to that
>of the 1920s (on a more global scale), partly due to the power of
>the creditors and partly a reaction to past inflation.
Adding to Jim:
i am amazed that there hasn't been a consideration of the unemployment that
accompanies deflation and the strong employment growth that typically
accompanies inflation (though not always of-course).
the distributional changes that accompany unemployment (which is always
disproportionately borne by low wage groups anyway) are major. poverty doesn't
seem to stem from losing real income as your holdings of credit diminish with
inflation.
but it sure does correlate strongly with not having an income at all due to
unemployment.
give me inflation any time. all i have to do is to index the nominal economy. a
much easier option that what is confronted in the labour market when a
deflation is on.
kind regards
bill
--
#### ## William F. Mitchell
####### #### Head of Economics Department
################# University of Newcastle
#################### New South Wales, Australia
###################* E-mail: [EMAIL PROTECTED]
################### Phone: +61 49 215065
##### ## ### +61 49 215027
Fax: +61 49 216919
## http://econ-www.newcastle.edu.au/~bill/billyhp.html
