In the latest Foreign Policy, Menzie Chinn and Jeffry Frieden argue on behalf of conditional inflation targeting.  A little inflation would be welcome, they say, in that it would "reduce the debt burden to more manageable levels."  They write:

Today our highest priority should be to stimulate investment, growth, and employment. Raising the expected inflation rate will lower real interest rates and spur investment and consumption. It will also make it difficult for the de facto dollar peggers, such as China, to sustain their policies. The resulting real depreciation of the dollar would stimulate production of U.S. exports and domestic goods that compete with imports, boosting American production. The United States would get faster growth, an accelerated process of deleveraging, a quicker recovery, and a firmer foundation upon which to address long-term fiscal problems.

To back up his assertion that a little inflation is not a threat, Chinn adds this graph of implied inflation at the Econbrowser blog. 

Do you agree with Chinn that fear of inflation is "unwarranted"?

Read A Call for Action: Conditional Inflation Targetting here.