The Genesis of Inflation and the Costs of Disinflation

25 Pages Posted: 1 Mar 2007 Last revised: 29 Nov 2022

See all articles by Laurence Ball

Laurence Ball

Johns Hopkins University - Department of Economics; National Bureau of Economic Research (NBER); International Monetary Fund (IMF)

Date Written: February 1991

Abstract

This essay asks how high inflation arises and why it is costly to eliminate. Specifically, the paper discusses the roles of price rigidity and credibility problems in explaining the costs of disinflation; the puzzle of persistent inflation triggered by onetime macroeconomic shocks; and the case for returning to adaptive expectations in theories of inflation.

Suggested Citation

Ball, Laurence M., The Genesis of Inflation and the Costs of Disinflation (February 1991). NBER Working Paper No. w3621, Available at SSRN: https://ssrn.com/abstract=967270

Laurence M. Ball (Contact Author)

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