What used cars tell us about the risk of too much inflation hitting the economy

Re:What used cars tell us about the risk of too much inflati... by imtringued on Sunday March 14, 2021 @08:09AM (#26454650)

>, yet the reporting from our central banks is saying all is well and inflation is low.

Low inflation is a catastrophe. I'm surprised you don't know that much. No, things aren't well.

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Re:What used cars tell us about the risk of too much inflati... by tanseydavid on Sunday March 14, 2021 @03:02PM (#26457852)

>> Low inflation is a catastrophe. I'm surprised you don't know that much.

I am surprised that you did not bother to explain what you mean by this.

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Re:What used cars tell us about the risk of too much inflati... by jfengel on Monday March 15, 2021 @12:18PM (#26467882)

Especially since it's unclear.

Most economists consider negative inflation a catastrophe, because of a "deflation spiral" -- prices go down, vendors and manufactures make less money, lay people off, they have less money to spend, so prices go down, etc.

(All other things being equal, of course, which they never really are.)

Most, but slightly fewer, consider low (0-2%) inflation to be sub-optimal, but not catastrophic. A little inflation nudges people to buy stuff (including investments) rather than stuffing their money in a mattress, which it slows the economy down.

About 2% is considered optimal. There are those who would like it lower.

Above 2% is considered a problem, and getting into catastrophic range somewhere on the order of 4-5%, depending on a whole lotta factors.

That's conventional wisdom among economists, but definitely not "I'm surprised you don't know that much" territory. Especially without that crucial distinction between negative and low inflation. 1% inflation simply is not a catastrophe.

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