Larsson's point on inflation

["Gregoire de Nowell (ci-devant)" <GN842@xxxxxxxxxxxxxxxxx>]

Larsson's point about inflation swings being worse than a constant level
of inflation is consistent with the old Max Weber theory that what
business desires most is predictability.

The list has already discussed a point being championed by Krugman (who
I think, here as eslewhere, borrowed from some real economists) argued
that a 3% inflation rate is better than a 0% inflation rate.  The gist
of the argument is that businesses with lower than average profits have
the ability to adjust their wage levels downward by refrainiing from
giving cost-of-living raises, which as we know from Mr. K, is less
difficult than actually forcing wages down.  Achieving wage rate
flexibility is, if I'm up on my neoclassicals, one of the magic tickets
to higher levels of employment.  I don't know what a hard-core
post-Keynesian would do with these theme.

Greg Nowell