EconoMonitor

Nouriel Roubini's Global EconoMonitor

Why Inflation Is Not a Desirable or Likely Way to Reduce Unsustainable Debts

Is high inflation the desirable way to reduce unsustainable debt burdens, and are policy makers likely to take that option? In a recent note with Arnab Das, “Honey I Shrunk the Gross National Debt!,” we discussed the various options—growth, savings, inflation, reduction/ restructuring—available to resolve high and unsustainable debt problems. In this note, I will discuss in more detail the pros and cons of using the inflation as a way to inflate oneself out of debt problems.

Please read Why Inflation Is Not a Desirable or Likely Way to Reduce Unsustainable Debts available to RGE clients.

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