[dnautics]

> I agree that you don't want currency deflation

https://krugman.blogs.nytimes.com/2010/02/13/the-case-for-hi...

> Yet when you have very low inflation, getting relative wages right would require that a significant number of workers take wage cuts. So having a somewhat higher inflation rate would lead to lower unemployment, not just temporarily, but on a sustained basis.

Just to be clear that we understand the policy here in blunt terms: The point of inflation is to cheat the working classes out of their income so that the ruling class can lay claim to high employment metrics. This is the price of currency stability.

[wpietri]

I think of it more as a workaround for a cognitive bias. Rational actors would be ok with wage cuts as their comparative advantage declines. But humans aren't rational actors, so we instead allow for a little inflation to make adjustment easier. Then people stay employed and productive.

I don't think the ruling class gives a shit about employment metrics. As we saw with the fashion for "austerity" in Europe, they were positively gleeful about other people's suffering. And no wonder; high unemployment reduces labor's bargaining advantage over capital, thereby increasing their relative power.