I've been wondering this question for a while. Ignoring current events, why is a little bit of inflation desirable?

I do understand that it's done to "stimulate" the economy so people don't let their cash rot in a checking account, but isn't it a zero-sum game? Everybody says that money is not meant to stay where it is, rather, should flow through the economy. But if the economy always needs injections of liquidity because otherwise it fails, isn't the economy broken?

I feel like there's something I can't comprehend about that.

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[–] 6 points 11 hours ago

You can’t look at the inflation rate in isolation and decide if that’s good for you or not.

If inflation is 0.0001% and you are laid off and there are no jobs and the stores have empty shelves not that you have any money to buy anything, that’s a bad economy.

If inflation is 3% but there are plenty of jobs and you get a 5% raise every year, that’s a good economy.

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