The Problems with Low Inflation (VIDEO)

This conversation was recorded on August 1, 2019.

Inflation has gone from being a threat to the economy because it was too high in the 1970s, to being a source of concern today because it is too low. Since 2012, the U.S. Federal Reserve has been persistently unable to lift inflation to reach its 2% target. Why is it a problem if inflation is low? EconoFact Executive Editor Michael Klein and Dan Sichel (Wellesley) highlight that low inflation often goes in hand with low interest rates, which give the Federal Reserve limited room to counter economic downturns. They also discuss what central banks can do to raise inflation and how some of the problems with measuring inflation complicate the issue.