The case for zero inflation

Article Abstract:

The Federal Reserve System can end inflation and achieve price stability if Congress passes legislation calling for the introduction of zero inflation. The long-term government interest rates would not go beyond 3 to 4%, and the mortgage rates would be around 6%. Economic growth, employment opportunity and savings would increase with the control of inflation. The reduction in the inflation rate would also reduce the probability of further recession.

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Asking the right question about monetary policy

Article Abstract:

An analysis of Robert Hetzel's paper on the Federal Reserve's method of formulating monetary policy proves that he has accurately interpreted its functioning and its implications. The Federal Reserve's earlier attempts to achieve a zero inflation using the 'Volcker standard' initially proved to be successful, but also induced the recession. No single variable can be used as a basis for monetary policy.

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Does the Fed abhor inflation?

Article Abstract:

The US Federal Reserve Board has often supported an inflation rate of between 4% and 5%. However, the liquidity trap that deflationary rates of 2% or less implies should not be regarded as a mainstay for inflationary policies.

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