Details

Autor(en) / Beteiligte

• Yeager, Leland

Titel

BOOTSTRAP INFLATION

Ist Teil von

• The Journal of finance (New York), 1976-03, Vol.31 (1), p.103-112

Ort / Verlag

Oxford, UK: Blackwell Publishing Ltd

Erscheinungsjahr

1976

Quelle

Alma/SFX Local Collection

Beschreibungen/Notizen

• PEOPLE RAPIDLY READJUST THEIR REAL-BALANCE HOLDINGS TO THE CHANGING CURRENT RATE OF INFLATION. CARRIED TO THE DEGREE NECESSARY FOR BOOTSTRAP INFLATION, SUCH BEHAVIOR IS NOT CONSISTENT WITH THE CONCEPT OF MONEY AND THE FAMILIAR REASONS WHY PEOPLE HOLD IT. IN FACT, PEOPLE HOLD MONEY TO AVOID EXCESSIVELY FREQUENT AND RAPID ADJUSTMENTS. TO THE EXTENT THAT PEOPLE DECIDE ON THEIR MONEY HOLDINGS IN NOMINAL RATHER THAN REAL TERMS AND BEHAVE SLUGGISHLY IN REVISING THEIR HOLDINGS UPWARD WHEN THE PRICE LEVEL HAS RISEN, THEIR EFFECTIVE DEMANDS FOR REAL CASH BALANCES SHRINK IN INFLATION RATHER PASSIVELY. SUCH SLUGGISHNESS CONTRIBUTES TO AN EMERGENCE OF AN EXCESS SUPPLY OF MONEY AND THUS FEEDS THE INFLATION. THE SLUGGISH BEHAVIOR THAT THWARTS A BOOTSTRAP PROCESS ACCORDS WITH REALITY. CHARTS. REFERENCES.