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The inflation rate is 10 percent, and the central bank is considering slowing the rate of...

The inflation rate is 10 percent, and the central bank is considering slowing the rate of money growth to reduce inflation to 5 percent. Economist Milton believes that expectations of inflation change quickly in response to new policies, dividend economist James believes that expectations are very sluggish. Which economist is more likely to favor the proposed change in monetary policy? Why?
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Economist James is likely to be more vocal and supportive of contractionary monetary policy by central bank as inflation targeting to 5 percent is possible because expectations in market are sluggish and have implementation lags and policy time lags and hence there is delayed in realisation of expected inflation to materialise. Moroever, people either spend on to money or rather save more which causes the expectations to be volatile and due to assymetric information the inflation goals take time to manifest in real terms.

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