by Ira Kawaller
FX Street
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One of the disturbing features about economics as a field of study is that it really doesn’t have a particularly good handle on inflation and how to cure it. Our best remedy is a blunt effort to try to slow economic growth to broadly limit inflationary pressures, thereby threatening to substitute higher unemployment and slower job creation for lower inflation.
Many economists see inflation as a monetary phenomenon caused by too much money chasing too few goods. Those with this perspective see tight money as the cure-all – i.e., retarding the growth of the money supply and forcing interest rates higher.