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November/December 2002, 
Vol. 84, No. 6
Posted 2002-11-01


by William Poole and Robert H. Rasche

"Flation”—not inflation, not deflation—is lifted from the title of a book by Abba P. Lerner. For the past 35 years in the United States and, indeed, in most of the world, policymakers and the public in general have been focused on the issue of inflation—that is, the continual upward drift in prices of the overwhelming fraction of goods and services produced in the economy.