On Oct 13, 2008, at 2:20 PM, ulisse mangialaio wrote:
> will the bailout generate inflation? have all the central
> banks'injections of liquidity generated inflation?
I looked at some of the countries with big banking crises and bailouts - Sweden, Norway, Japan (well, sort of a bailout), and Korea. In all four cases, inflation declined. My guess is that the deflationary effects of a credit crunch outweigh the inflationary impulse of all that injected liquidity.
Doug