Abstract
In neo-classical monetary theory, the purchasing-power value of money falls when the money stock exceeds what people wish to hold. People bid down the value of money by offering it for other things, just as stockholders bid down the value of a stock by offering it for sale. This is an incomplete explanation of inflation, however, because it fails to explain why the money stock remains excessive. Any theory of inflation must explain why presumably equilibrating decreases in the monetary unit’s purchasing power fail to equilibrate— that is, why money continually returns to abundance.
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© 1992 Paul Beckerman
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Beckerman, P. (1992). Inflation Feedback. In: The Economics of High Inflation. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-21713-7_3
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DOI: https://doi.org/10.1007/978-1-349-21713-7_3
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-21715-1
Online ISBN: 978-1-349-21713-7
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