I’ve been wondering this question for a while. Ignoring current events, why is a little bit of inflation desirable?
I do understand that it’s done to “stimulate” the economy so people don’t let their cash rot in a checking account, but isn’t it a zero-sum game? Everybody says that money is not meant to stay where it is, rather, should flow through the economy. But if the economy always needs injections of liquidity because otherwise it fails, isn’t the economy broken?
I feel like there’s something I can’t comprehend about that.
I think OP isn’t suggesting deflation, but equation. As in, keeping the value of a dollar stable rather than constantly changing. Like that Rick and Morty episode where there’s that machine that sets the value of $1 to $1
Not seen the episode so I’m not sure how it’s supposed to work.
A small inflation greases the wheels of the economy.
The central bank never hits the goal exactly, if you aimed for 0% you’d end up with sometimes inflation and sometimes deflation.
What is the value of one dollar anyway? When it was pegged to the gold the price of stuff compared to gold still varied.