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Why is inflation desirable? (lemmy.world)
submitted 23 hours ago by to c/asklemmy@lemmy.world
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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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[–] 4 points 22 hours ago

In addition to incentivising spending, there's also the fact that you cannot perfectly control inflation. Even if you target an inflation of 0%, it might still go above or below that. But below 0 is only deflation and once you get there, you risk going into a deflationary spiral. So it's a safety buffer as well.

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