Class and Monetary Policy

Paul Krugman, NYT
July 8, 2014 12:37 pm

I’ve been writing a lot lately about the continuing influence of inflation hysterics despite their awesome wrongness over the past five-plus years. One question that naturally arises is whose interests are served by this unjustified influence.

You don’t want to be too crude about it. I don’t think there are a lot of clear-headed hard-money types who secretly admit to themselves that their models have failed and that the policies they advocate could mire the economy in a permanent slump, but nonetheless say what will support their class interests. Instead, interests feed ideology, and the ideologues may then be sorta-kinda sincere in their beliefs.

Still, it is worth asking who benefits from low inflation or deflation, and from higher interest rates. And the answer, basically, is rich old men.

(More here.)