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Robert Johnson: Focus on Inequality, Not Inflation

NET’s Executive Director Rob Johnson was recently interviewed by a reporter for CNBC India, who asked him about the risk of endemic inflation – specifically, whether fears of an inflationary spiral are justified.

"With the amount of slack we have in the US economy," Johnson responded, "there is essentially no danger whatsoever of an endemic inflation buildup."

In fact, Johnson said that he was actually relieved that prices were rising, both in the US and in Europe, because he belived that the rising prices alleviated risk of a deflationary spiral. On the other hand, what concerned Johnson was the potential of rising food prices, and how this could exacerbate social inequalities, especially in developing countries like China, Brazil, and India:

"A rise in food prices themselves," Johnson said, "take people who are at the lower end of the wealth or income spectrum, and put them under pressure."

http://ineteconomics.org/blog/robert-johnson-focus-inequality-not-inflation

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