Boom Bust Season 1 Episode 57 George Selgin and Kyle Harrington On Deflation and the US Economy

George Selgin and Kyle Harrington join host Bart Chilton on this episode of Boom Bust to discuss deflation and its impact on the US economy. Selgin believes that deflationary pressures are emerging due to an increase in productivity and technological advancements, which have led to cheaper goods and services. However, he also notes that this may not necessarily harm the economy as long as it is accompanied by an increase in productivity and a decrease in costs.

On the other hand, Harrington argues that deflation could lead to a decrease in consumption and investment, which could ultimately harm the economy. He believes that the Federal Reserve should take measures to prevent deflation and ensure stable prices through targeted inflation.

Chilton and the guests also discuss the impact of deflation on debt and monetary policy. Selgin argues that deflation can actually be beneficial for debtors, as it reduces the real value of their debts. However, Harrington notes that deflation could lead to a vicious cycle of reduced spending, investment, and economic growth, which could ultimately harm debtors as well.

The guests also discuss the potential impact of deflation on different sectors of the economy, including housing, stocks, and commodities. They agree that deflation could lead to a decrease in asset prices and harm certain industries, but note that the overall impact would depend on a variety of other factors.

Throughout the episode, Chilton and the guests engage in a lively and informative discussion on the nuances of deflation and its potential impact on the US economy. They explore different viewpoints and factors that could contribute to both positive and negative consequences of deflation, highlighting the complexity of this economic concept.