In economic thought, who made the well known statement, "Inflation is unjust but deflation is inexpedient. Of the two, deflation is worse"?

Introduction / Context:
Famous quotations by economists are frequently tested in general knowledge and introductory economics exams. This particular quote compares inflation and deflation and argues that although inflation is morally unfair, deflation is practically more damaging to the economy. The question asks you to identify which economist is associated with this statement, which reflects a broader concern about employment and economic activity.

Given Data / Assumptions:

• The quote states that inflation is unjust but deflation is inexpedient, and of the two, deflation is worse.
• The options list J. M. Keynes, Amartya Sen, J. G. Gurlay, and J. N. Bhagwati.
• We assume standard macroeconomics knowledge where John Maynard Keynes is strongly associated with policies against deflation and depression.

Concept / Approach:
The key concept is the Keynesian view of macroeconomic stability. John Maynard Keynes analysed the Great Depression and argued that deflation and prolonged unemployment can cause severe real hardships, even if inflation appears morally objectionable. According to this view, mild to moderate inflation can sometimes be tolerated in order to avoid the far more damaging consequences of deep deflation and economic stagnation. This idea is captured in the quoted statement and is consistent with Keynesian advocacy for active fiscal and monetary measures to prevent deflationary spirals.

Step-by-Step Solution:
Step 1: Recall that J. M. Keynes is famous for his work The General Theory of Employment, Interest and Money, which focuses heavily on depression, unemployment, and deflation.Step 2: Consider that Keynes supported policies that accept some inflation rather than allow economies to slip into deep deflation.Step 3: Compare this attitude with the quote, which labels inflation as unjust but deflation as worse, in line with Keynesian priorities.Step 4: Recognise that Amartya Sen, J. G. Gurlay, and J. N. Bhagwati are associated with development economics and welfare issues, not this specific aphorism about inflation and deflation.Step 5: Conclude that J. M. Keynes is the correct author of the statement.

Verification / Alternative check:
Many economics quiz books and exam guides explicitly attribute this quote to John Maynard Keynes when discussing inflation versus deflation. When reading about Keynesian economics, students often encounter similar ideas where Keynes emphasises that unemployment and output loss under deflation are more harmful than the distortions caused by moderate inflation. This consistent attribution across multiple sources confirms that the statement belongs to Keynes rather than the other economists listed.

Why Other Options Are Wrong:
Amartya Sen: He is known mainly for his contributions to welfare economics, social choice theory, and poverty measurement, not for this particular quote about inflation and deflation.

J. G. Gurlay: This name does not appear as a central figure in standard macroeconomics discussions about inflation and deflation in the way Keynes does, making this option highly unlikely.
J. N. Bhagwati: Jagdish Bhagwati is associated with trade theory and economic reforms but not with this specific statement regarding the relative harmfulness of deflation.

Common Pitfalls:
Candidates sometimes guess Amartya Sen or J. N. Bhagwati simply because they are well known Indian economists, even though the quotation clearly matches the historical context of the Great Depression and Keynesian thinking. Another pitfall is not appreciating the subtlety of the phrase inflation is unjust but deflation is worse, which resonates strongly with Keynesian emphasis on employment and aggregate demand. Remembering the association between the Great Depression, deflation, and Keynes will help prevent such errors.

Final Answer:
The statement was made by the economist J. M. Keynes.