John Hood isn’t the only one worried about the threat of higher inflation. Those who read a recent column from George Will, the one in which he warned that ?just 18 years of 4 percent inflation would cut currency?s value in half,? will want to consider this passage from the article Hood cites today from the latest Business Week:

The 4% idea was raised on Feb. 12 in a widely noted paper by Olivier Blanchard, research director of the International Monetary Fund. Blanchard suggested that higher average inflation would make it easier for central banks to stimulate growth in a recession by cutting interest rates. The idea is that cutting borrowing costs to below the inflation rate encourages expansion by effectively paying people to take out loans. Thus, cutting interest rates to zero can be more stimulative when inflation is 4% than when it’s just 2%. That’s a dangerous idea, Warsh said. “Central banks that desire just a little more inflation may well end up with a lot more.”

Seeking a higher inflation rate ranks up there with increased government stimulus spending in the pantheon of bad ideas.