Consider the process of disinflation. Typical estimates for the sacrifice ratio for many developed economies suggest that reducing inflation by 1 percentage point "costs" the economy between percent of real GDP.

Question

Quizplus · Accepted Answer

The sacrifice ratio is typically estimated to be between 2 and 4 percent of real GDP for many developed economies, indicating the cost of reducing inflation by 1 percentage point.

Consider the Process of Disinflation