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Actually, under negative real growth rates you'd need not merely to avoid deflation, but to actively promote considerable inflation: What matters for the stability of the credit and contract network that underpins the  modern economy is continuous robust growth in nominal incomes. Which means that if an external constraint imposes negative real growth rates, then those must be compensated by inflation.

- Jake

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by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Nov 18th, 2013 at 10:05:43 AM EST

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