I want to follow up a little on my discussion of the liquidity trap that we are have been in. Brad Delong has an excellent post today called "Four Years After the Wakeup Call". In it he shows some graphs which illustrate very well our the liquidity trap. Delong first serves us two graphs on … Continue reading What a Liquidity Trap Looks Like in Pictures
We can't inflate away government debt. From Joe Wiesenthal at Clusterstock and Sorry Tim And Ben, Inflation Won't Solve The Debt Problem As this chart shows, instances of declining debt-to-GDP rarely coincide with periods of inflation. If it did If it did, we'd see more dots in the lower right-hand quadrant.