Given that inflation erodes the value of money, should the Federal Reserve pursue a goal of deflation?

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Given that inflation erodes the value of money, should the Federal Reserve pursue a goal of deflation? Would deflation create some of the same problems as inflation in terms of the information communicated by price changes and the arbitrary redistribution of income? Briefly explain.

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Money, Banking, and the Financial System

ISBN: 978-0134524061

3rd edition

Authors: R. Glenn Hubbard, Anthony Patrick O'Brien

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