Would hyperinflation be a problem if GDP and wage growth were simultaneously skyrocketing?
Is such a scenario even possible?
Deflation just seems pretty bad any way you slice it.
It might be possible in theory if you had productivity doubling every month or something; either way wage growth would probably lag behind a bit because of stickiness. Even if it was possible, the menu costs associated with hyperinflation would make it impractical to continue.
And yes, deflation is usually bad. It gives incentives for suppliers to stop supplying (falling prices means falling profits and fewer producers) and consumers to delay consumption (why buy something now if you believe prices will be lower next month?). Usually that would add up to an anemic economy.
