In fact, the empirical evidence suggests that the gains may be larger 3 than this." Output gains of that magnitude are certainly worth having. But they don't represent the kind 1  Cited by Jerry Jordan, President of the Federal Reserve Bank of Cleveland, in a speech entitled "The challenge of stability: Mexico's pursuit of sound money", 29 April 1999.
2  Barro, R. (1995), "Inflation and Economic Growth", National Bureau of Economic Research Working Paper No. 5326. In this paper, the adverse effect of inflation on growth diminishes over time, with the economy converging back to its long-run growth rate, but at a permanently lower level of output. 3  Issing, O. (2000), "Why Price Stability?