Research on inflation by Reis and Watson, and by Aizenman and Nancy. The former says that inflation is composed of 20% common monetary inflation and the rest relative inflation among goods. The latter says the most debt we can inflate away is about 20%. Are these two numbers a coincidence?
Reading both papers (which I am still doing), my model says, of the former, as bankers push inflation they also spread the relative pricing of consumer goods and hit a constraint. The latter says that if the bankers push inflation then they also cause future debt to be indexed to inflation and they hit a constraint.
HT to Econobrowser and Econolog. I post this to keep these two references close for this issue is going to play out very soon. We are at the 20% limit, or very near.
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