The Economic Perspective: “Is Inflation Dead?”

This is Mary Walden with economist MW welcoming you to the economic perspective. Today’s program asks if inflation is dead.  Mike, one of the interesting aspects of your profession – economics – is that it continues to evolve and change.  Consider inflation.  Forty years ago, it was rampant, rising at double digit rates annually.  Now policymakers around the world worry more about deflation, or falling prices. What happened?

  • Good question, and the subject of a superb analysis by the international new magazine, The Economist
  • Inflation rates have fallen dramatically in the US, but also around the world
  • Many benefits
  • With low inflation, easier to detect prices changes due to individual markets
  • Also makes planning of future expenditures, such as for retirees, easier
  • Keeps businesses on their toes, because can’t just pass on price increases and cover them with general inflation
  • International markets and technological advances are the main reasons for low inflation
  • I’m MW

And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.