what is good about inflation?

Answer 1

In the short-term; it causes unemployment to go down.

Answer 2

People who owe money benefit from inflation. Lets say you have a 20 mortgage and pay $1000 dollars a month payment. Lets say you earn $10 000 a month, 1/10 of your salary goes to your mortgage payment. If we assume that your income rises with inflation, and an inflation rate of 10%, in ten years time you will have a salary of $155,624. But you still pay $1,000 dollars a month, or 0.7$ of your salary. So you become better off.

Somebody defined inflation as "too much money chasing too few goods". So inflation means that people have a lot of money in their pockets.

I can not get into the reasons, but historically whenever we had a high boom we also had a large bust. The roaring twenties was followed by the depression thirties. During the 70's we had high inflation and during the early eighties we had a recession. That is why inflation is considered bad.

Answer 3

The main reason a little inflation is good, is because it encourages consumers to spend. If there would be no inflation or even deflation, consumers would expect prices to stabilize or even come down, and this would discourage them to spend money or delay buying decisions until prices get even cheaper. This would cause the economy to slow down or shrink, which would be bad for unemployment. High inflation is bad because it fuels inflation expectations and will create upward spiraling prices.

Answer 4

the good thing about inflation is that it means that everyone has a job. This is not to be confused with stagflation, which is really bad.

Answer 5

Nothing, it causes diso-ordination,

Answer 6

It drives interest rates down