"Inflationary" was the word used by two Harvard economists yesterday to describe the lifting of curbs on installment buying next fall.
The bill relaxing restrictions on the $1-down, 51-a-week transactions was signed last week by President Truman, over the protests of the Federal Resrve Banks. It will take effect November 1.
Richard M. Goodwin, assistant professor of Economics, said that relaxation of the curbs would accentuate inflation, although he added he couldn't say how much. Questioned as to the possible value of the relaxation of curbs in the event of a recession, he said that it probably would not help. "People are pessimistic in a recession, and thus they would not take advantage of installment opportunities," he continued.
Andreas G. Papendroon, instructor in Economics, agreed that "any relaxation of installment credit would enhance present-day inflationary forces." He belived, however, that should there be a recession around November 1--and he emphasized that he was not predicting--the lifting of credit curbs might have a stabilizing effect.
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