The Economics of High Inflation

This book describes the complex of economic processes which sustains inflationary pressure in nations with severe inflation problems. Considered as a macroeconomic phenomenon, inflation is a more intricate matter than "too much money chasing too few goods" or excessive public-sector deficits. Inflation is best understood as a manifestation of disagreement within a society about the repartition of purchasing power. The difficulty of resolving this disagreement ultimately explains why the struggle against inflation in economies like those of Argentina and Brazil has been so frustrating.In this accessible volume, Paul Beckerman uses an innovative approach to consider the strategies inhabitants of economies with lengthy inflation experience use to maintain their purchasing power despite inflation. He examines how these tactics function as "feedback mechanisms", economic processes by which, inflation in any given time period generates inflationary pressure in subsequent periods, and how they complicate the efforts of policy-makers to achieve stabilization.