IN any Economics 101 class, students are often made to understand that a modest level of inflation is good for the economy as a whole. A healthy level of inflation contributes to production increase as more money translates to more spending, which directly influences aggregate demand.
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This stems from the ideology of renowned British economist John Maynard Keynes, the father of the Keynesian economics model, which is premised on the “level of investment in the economy must exceed its savings rate in order to promote economic growth.”
