Inflation Is Lower And More Stable And

To Finance This Trade Deficit, The U.s. Has To Borrow From The Rest Of The World Or Sell American Assets Like Stocks, Businesses, And Real Estate To The Rest Of The World.

But Then In April Of 1985 The Dollar Began A Sharp Decline. The Dollar's Trade Weighted Value Fell 23 Percent In Just 12 Months And By A Total Of 37 Percent By The Beginning Of 1988.

Homeowners Who Refinanced Their Mortgages Took Out Cash And Reduced Their Monthly Payments At The Same Time. Much Of The Cash Obtained By Refinancing Was Spent On Consumer Durables, Home Improvements And The Like.

And Finally, No Matter How Good The Science Gets, There Are Problems That Inevitably Depend On Judgment, On Art, On A Feel For Financial Markets.

Thirty Years Ago, Many Economists Argued That Inflation Was A Kind Of Minor Inconvenience And That The Cost Of Reducing Inflation Was Too High A Price To Pay. No One Would Make Those Arguments Today.