Zero Inflation and Its Effects On A Countries Economy.
This paper will attempt to cast some clarity on the debate of zero inflation. This paper begins with an analysis of the consequences of low inflation on the conduct of monetary policy. This paper will answer the pressing question of whether or not workers and firms exhibit nominal inertia near to zero. This paper determines that a little inflation, perhaps 1 to 3 percent is a far more efficient policy choice than zero inflation. Such a moderate inflation target would allow real wages to decline where necessary without firms having to impose wage cuts or fire workers. 18 pgs. 27 f/c. 8b.
