Inflation Increase Forecast
HOT SPRINGS, Va., May 28ÛÓAn Indiana University economist said today that while the American people donÛªt like inflation, they ÛÏlike it better than what we would have to do to stop it.Û</br></br>Edward E. Edwards, Fred T. j Greene Professor of Finance at Indiana, told the Metropolitan Washington Savings and Loan League Convention here, there is a 55 per cent likelihood of an early return to the rapid increase of consumer and business spending thati characterized the 1968-1969 boom. Along with the boom, will come an accelerating rate of inflation, higher interest rates and a new credit crunch several years hence, he predicted.</br></br>There is an even greater probabilityÛÓ80 per cent, he saidÛÓthat interest rates will go higher even if the economy doesnÛªt rebound so quickly and the rate of inflation is more moderate, Edwards said.</br></br>There is no more than a 20 per cent probability, Edwards predicted, that the current economic recovery will continue to be very slow or that interest rates will continue as low as they are today.</br></br>Edwards criticized the idea ÛÏgetting around in the United States now, that we can learn to live with 4-to-5 per cent inflation a year.