Over the last few months, Yellen repeatedly stated that lower oil prices were “positive” for the US economy. This is simply astounding because the Fed has repeatedly told us time and again that it was IN-flation NOT DE-flation that was great for the economy.
And yet, repeatedly, the head of the Fed admitted, in public, that deflation can in fact be positive.
How can deflation be both positive for the economy at the same time that the economy needs MORE inflation?