Hacker News new | ask | show | jobs
by yossarian1408 1563 days ago
If your country has a central bank, I promise you the crash is going to be inflationary.
1 comments

I think a more measured stance is that the crash WON'T be (significantly) deflationary.

If the crash is "naturally" deflationary, the central banks have now shown a commitment to sustaining inflationary policy to keep inflation at target.

But in the case of a "naturally" inflationary recession (stagflation), central banks will be hesitant to ramp up deflationary policy, because regaining employment levels will be a higher priority, and deflationary policy tends to hurt employment.