Fallow on inflation

Brian Fallow, NZ Herald Economics Editor, writes:

So we have David Cunliffe in his state of the nation speech on Monday deploring that people are struggling with a rising cost of living while their wages stay still and then talking about “reforming” the Reserve Bank Act to assist exporters.

By reform, they mean to have more inflation – which of course makes the cost of living increase!

It is one of the ironies of our political discourse that the parties of the left are the most casual about inflation when it is the poor and economically powerless who suffer most when inflation gets out of hand and as it is brought under control again. Perhaps they are too young to remember. 

If more inflation is the answer, the question is wrong.

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