Olivier Blanchard (“It is time to revisit the 2 per cent inflation target”, Opinion, November 29) lets us know that “magic money tree” economics is alive and well. He writes that “the additional costs of 4 per cent inflation versus 2 per cent inflation were small”.
Really? For whom? Two per cent inflation doubles prices in 35 years. Four per cent inflation does this in 17.67 years.
Presumably doubling the acceptable rate of inflation will also mean that, on balance, interest rates will also double.
These increased “costs” hardly seem “small”.
Guy Wroble
Denver, CO, US
