In the post-WWII United States, the rate of inflation has a very clear tendency to fall whenever the unemployment rate rises above 7%:
When the unemployment rate has been above 8%, the average fall in the annual CPI inflation rate over the next two years has been 4.5 percentage points.
Our current annual inflation rate is about 1%:
Does this mean that two years from now we can expect our annual inflation rate to be -3.5%--that we can expect fairly rapid deflation? The odds...
Published on August 11, 2010 11:42