If it is possible to target 2% inflation and 3% inflation, then it is possible to target 0%. We're not dealing with particularly complex ideas here.
And if we anchored the unit of measurement to some commodity - which appears to have been standard practice for most of human history, I might add - then we'd be able to get a pretty good estimate of relative real changes in prices. It'd be more accurate than the current system of targeting constant price changes.
It wouldn't be perfect, but the current policy is basically printing money and handing it out to asset owners - which is not only imperfect but wildly unfair, distorts markets in unhelpful ways and looks a lot like it is heading for a large financial collapse.
> If it is possible to target 2% inflation and 3% inflation, then it is possible to target 0%
Look at the variance about 2%. Except now you risk depression. Which means when you get it a little wrong, you get people and companies defaulting on loans and mass lay-offs.
> if we anchored the unit of measurement to some commodity - which appears to have been standard practice for most of human history
The theory for why this is a bad idea was written in the 19th century and practice the 20th. Also, if you’re concerned about the rich getting richer, deflationary and anti-growth commodity money is the opposite of what you want.
Does any of this this theory come with a reference? Because as arguments go that is so information-lite I'm not even what theory you are invoking.
I'm not worried about the rich getting richer. I'm worried about market distortions and unfairness. I think everyone should be getting richer; the rich included.
> Which means when you get it a little wrong, you get people and companies defaulting on loans and mass lay-offs.
So, not much change from the current state? We have a big financial crisis about once a decade, usually accompanied by mass layoffs and bankruptcies.
Besides, defaulting on loans and layoffs isn't when the damage is done. The damage is done when bad loans are made and people are hired for jobs that aren't actually value-creating. You're complaint here is that we would be detecting and recognising real economic damage - that is something we should be doing. If people make bad loans they shouldn't get to pretend they made good ones, and people should be redeployed from low-value jobs to high-value jobs. There is no point making people do bullshit work.
> Does any of this this theory come with a reference?
You’ve been provided with several in these threads. A good start might be Mankiw’s Money & Banking. It’s a standard introductory text and addresses many of the common misconceptions you’ve brought up.
Whoops, I mixed up Mankiw’s Principles of Microeconomics and Cline (or Cechetti’s) Money, Banking and Financial Markets.
The 19th century source is Bagehot. But that won’t make sense without the above fundamentals. (Bernanke’s work on the Great Depression is also a good empirical study on deflation. But again, not worth tackling until after one of the Money & Bankings.)
You can’t. You need more data. Otherwise, you wind up trying to mandate what a wheat plant does by law. The simple answer is a siren’s call.