This is the Cato Daily Podcast for Wednesday, May 8th, 2013. I'm Caleb Brown.

Is inflation holding back our economic recovery.

Not too much of it but too little.

Paul Krugman argues that the US has too little inflation.

Jerry Odriskill, a senior fellow at the Cato Institute,

makes his case.

Paul Krugman argues that there is not enough inflation for right now

and he points to people like Alan Meltzer and Paul Ryan basically as inflation hawks

people very concerned about inflation but he argues that there is not enough of it right

now what do you think of that?

Well I think this is dangerous

nonsense it used to be the people who called for inflation

as a cure to real economic ills were considered to be monetary cranks

uh... inflation disrupt economic activity, impedes economic calculations of profit and losses, and inevitably

redistributes income capriciously among groups.

Now let's explore that just a little bit with respect to

MP's economic calculation.

Part of that process, if I understand it correctly, is that relative prices change over time

and not every price changes at the same rate when we experience inflation and so our ability to reckon what a dollar

is worth in terms of this good or that good is what is being disrupted.

That's a succinct statement of the problem.

And it also means that in the process of inflation and prices not changing at the same rate.

...