Princeton economist Alan Blinder, who has served as Vice Chairman of the U.S. Federal Reserve, once wrote the following:
The costs that attend the low and moderate inflation rates experienced in the United States and in other industrial countries appear to be quite modest—more like a bad cold than a cancer on society. . . . As rational individuals, we do not volunteer for a lobotomy to cure a head cold. Yet, as a collectivity, we routinely prescribe the economic equivalent of lobotomy (high unemployment) as a cure for the inflationary cold.13
What do you think Blinder meant by this? What are the policy implications of the view-point Blinder is advocating? Do you agree? Why or why not?