To close the output gap some serious economists are calling for an uptick in inflation. Clearly, inflation will change the relationship between sales prices and business costs. Inflation is designed to raise commodity prices in relation to wage rates (sound familiar - oil/gold/food?). This will, in turn, restore business profits and encourage a resumptions in output. This could also be done by a reduction in unworkable wage rates. Even those same smug economists will freely admit this. Take a look at Krugman's commentary on Greece for instance. However, these sort of economists feel that they must "protect" labor (although I do not quite understand how depreciating one's currency and making the cost of living higher actually "protects" the middle class). What these serious economists are really proposing is to DECEIVE labor by reducing real wage rates through an increase in prices. Thus, they are charlatans (at best) or outright liars (at worst). They rely on such statements as "our national income has doubled" to imply that we are much richer. People who earn a higher wage feel that they must, in some way, be better off. Of course, their standard of living has fallen greatly in the meanwhile.