Professor Sherry Jarrell Explains Inflation and Deflation on the Rush Limbaugh Show

11.10.2010 Article, Faculty News, General

Inflation, Deflation, and QE2
From the Rush Limbaugh Show on Nov. 9, 2010

CLICK HERE to listen to Professor Sherry Jarrell's conversation on the Rush Limbaugh Show.

Last week, the Federal Reserve announced another huge purchase of U.S. bonds called "QE2," or quantitative easing, in an effort to keep interest rates low and spur economic growth. 

Many economists worry about this causing inflation. Professor Sherry Jarrell called into the Rush Limbaugh Show to point out that the Fed's purchase of bonds did not necessarily lead to a one-for-one increase in the money supply. 

She believes that the Fed may have a false sense of confidence in its ability to combat inflation and that their policies are being influenced by Chairman Ben Bernanke's fear of deflation.

Read a complete transcript of the conversation here.