Moderate inflation can help in dealing with the huge debt created by Covid-19, say economists

7 May 2020 (Last Updated May 7th, 2020 09:55)

7 May

The Covid-19 pandemic has led to unprecedented levels of unemployment, huge levels of debt and an imminent threat of inflation or even deflation.

Economists believe that moderate levels of inflation can help economies around the world to deal with the debt and recover from the crisis.

Atif Mian, an economist, tweeted that the world is witnessing the highest levels of debt for the first time in many years. He added that the best way to reduce this debt will be moderate inflation particularly in advanced economies.

Mian noted that implementing moderate targeted-inflation may be a challenge in the near term.

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