Nobel Economists Push for Inflation
By MERRILL GOOZNER,
Posted: May 01, 2012
The number of Nobel Prize-winning economists calling for higher inflation targets at the Federal Reserve is growing. Robert Engle, a New York University economics professor who won the profession’s top prize in 2003, spoke earlier today at a Bloomberg summit in Washington.
“A little bit of inflation would do a whole lot of good for the U.S. economy, would certainly do a lot of good for the housing market,” he said. “If we had just a little bit of inflation and house prices went up, all the sudden they’d be above the mortgages.”
In last Sunday’s New York Times Magazine, Princeton University’s Paul Krugman, also a Nobel Prize-winner, made the same suggestion to his former Princeton colleague, Ben Bernanke, who now runs the Fed.
Bernanke rejected those suggestions at his press conference last week, saying lifting the inflation target would sacrifice the Fed’s hard-won credibility. But then, what does he know? He is merely the world’s foremost scholar on the monetary mistakes made before and during the Great Depression. He never won a Nobel Prize for economics.