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Businessweek Archives

Right On Inflation, For The Wrong Reasons


Readers Report

RIGHT ON INFLATION, FOR THE WRONG REASONS

Your Commentary is right: "A little inflation could jump-start the economy" (Top of the News, Oct. 19). Only the analysis is wrong.

Inflation, like cholesterol, is of two kinds: the good and the bad. "Good" inflation is when prices rise because of increased demand from users of goods and services. This is caused when government influences are the weakest and the market has few restrictions on producers to modify their products and enter new market areas. "Bad" inflation is caused when the medium of exchange is diluted: This is when the government prints more money, and we have more and more paper chasing after the same amount of goods and services.

Almon H. Clegg, President

CCI

Rockaway, N.J.


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