Inflation is Not an Easy Answer for Debt
New Inflation Risk debate posting live!
BY Jennifer Hughey | April 16, 2010
Should inflation be seen as an “easy” way to deal with runaway debt?
In a white paper posted on www.cirdebates.com, guest analyst Peter Hooper found that sovereign risk among industrial countries has become a more central focus of market attention as projections under current fiscal policies show considerable instability in debt/GDP ratios for the US and other major countries.
Hooper is Chief Economist with Deutsche Bank Securities and co-wrote the white paper with Christine Dobridge and Torsten Slok. They considered the scope for stabilizing and reducing debt/GDP ratios via increases in inflation and the analysis indicated that the scope is at best only limited and temporary.
To read more of Peter’s guest posting, join the debate.