I wonder if they will be willing to accept inflation in lieu of the alternative? Remember that inflation affects international trade far more than domestic.
When prices rise, the cushion is the public. They demand higher returns and wages, but they can also save less with their substantial reserves. Finally they can buy less, as during the bitter Carter-era stagflation, caused by Jimmy’s greed.
Inflation in some products will neutralize the effect of deflation in others (housing). Inflation also heats the economy to some extent, so helps to limit recession.
The extra low value of the dollar makes “buying American” very attractive to foreigners. But it kills their exports to America.
Inflation favors debtors, and since the US government is the biggest debtor in the world, it might reduce the pressure to make good on those debts.
As a nation the US has had an unnaturally low inflation rate since the destructive Carter years. But perhaps having a 5%-8% inflation rate for a few years might not be such a bad thing, compared to the alternative.
Speak for yourself...5%-8% inflation vs. my 1% per year wage growth...I just don’t like those numbers!