For those who worry about growing inequality, inflation might actually be a salve, up to a point. A 2014 study of developed economies found that as inflation rose, income inequality tended to shrink. Inflation could be as high as 13 percent, the research found, and still act as an equalizer, shifting the benefits of economic growth toward lower-income individuals. What doesn’t rise with inflation are college loans and other debt. Now might be a good time for modestly higher inflation, said the Harvard economist Ken Rogoff, who called for higher inflation to reset the economy after the housing bubble burst.

Source: New York Times July 14, 2021 11:26 UTC