Inflation and its impact on society

Summary

Inflation is defined as a persistent and more or less substantial decline in the value of money. Its causes and possible remedies are briefly analysed from the starting point that inflation is basically a monetary phenomenon. Three stages of seriousness are distinguished on a basis of realized and anticipated degrees of inflation.

The disruptive effects of inflation are described; it is explained how and why the economic consequences of inflation ultimately lead to social and political complications of a serious nature.

The conclusion is that the fight against inflation is a major political problem. It demands political leadership which is both able and prepared to convince the population that, however high the cost of combating inflation effectively, the cost of not doing so will be considerably higher.