Is no inflation bad
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Is zero inflation good or bad!
Pros and cons of zero inflation
Why Didn't Quantitative Easing Lead to Hyperinflation?
After the 2008 Great Recession the U.S. Federal Reserve administered round after round of Quantitative Easing (QE) to prevent a deeper economic depression.
Many people feared that it would ultimately lead to runaway inflation like the kind seen in Zimbabwe (and its 1 trillion dollar bill), Argentina, Hungary, or the German Weimar Republic.
Prices did rise modestly during that period, but by historical measures, inflation was subdued, and a far cry from being hyperinflation.
Instead, most of the extra money stayed in the financial sector, where banks used it to shore up their own balance sheets.
Key Takeaways
- Prices did rise modestly in the low-interest rate environment that followed the Great Recession, but not nearly enough to be considered anything close to a hyperinflation.
- Hyperinflation is an exponential rise in prices and is generally associated with a collapse in the underlying economy.
- During the Great Recession banks still had bad loans and toxic assets on their balance sheets as a result of the housi
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