Love for inflation

With low inflation, Firms find it hard to cut wages in many cases—like when a recession strikes, reducing the demand for workers. But if inflation is high, then the real cost of labour can fall even if actual wages don’t (because workers become cheaper relative to the goods they are producing).

 

The Economist explains

Why the Fed targets 2% inflation
The Economist explains
Sep 13th 2015

by R.A.

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