The bank is worried about so-called second-round effects of inflation.
But that's in "nominal" terms, without adjusting for the effects of inflation or its opposite, deflation.
Such claims are largely gibberish unless accompanied by some analysis about the effects of inflation.
The situation is worse when you factor in the effects of inflation and income tax.
Moreover, the effects of inflation will erode the value of the money over time, they say.
What better time than now, when ordinary Russians are starting to feel the effects of inflation and rising food prices?
For example: average weekly incomes have fallen by 14.3percentnt since 1973, after the effects of inflation are discounted.
When the effects of inflation were taken into account, the decline from today's spending levels was only about 10%.
Martin Feldstein, a colleague at Harvard, recalls him being absorbed by the harmful effects of inflation.
If we factor the effects of inflation into these figures, the numbers are even harsher.
Back then, as now, the members of the Fed were well aware of the harmful effects of inflation.
