Federal Reserve Bank of Philadelphia President Charles Plosser said Thursday he would like to see the central bank target a lower rate of inflation, adding he wouldn’t be too concerned if the economy entered a period of deflation.
“It’s not obvious a period of mild deflation is such a bad thing,” Mr. Plosser said in response to a question after speaking at the Cato Institute.
Mr. Plosser said he saw no reason the Fed couldn’t target a zero inflation rate, which other Fed officials have argued against because of a greater risk of deflation. Many economists believe that falling prices bring economic stagnation.
Mr. Plosser, however, said many economic models have shown that a period of mild deflation, “at least in theory,” could be positive.
Yeah, like my friend Patricia says, maybe like Draghi he thinks people will be able to buy more stuff!
I bet Scott ‘trembled’!