Why Do People Dislike Inflation?
AbstractA questionnaire survey was conducted to explore how people think about inflation, and what real problems they see it as causing. With results from 677 people, comparisons were made among people in the US, Germany, and Brazil, between young and old, and between economists and non-economists. Among non-economists in all countries, the largest concern with inflation appears to be that it lowers people's standard of living. Non-economists appear often to believe in a sort of sticky-wage model, by which wages do not respond to inflationary shocks, shocks which are themselves perceived as caused by certain people or institutions acting badly. This standard of living effect is not the only perceived cost of inflation among non-economists: other perceived costs are tied up with issues of exploitation, political instability, loss of morale, and damage to national prestige. The most striking differences between groups studied were between economists and non-economists. There were also important international and intergenerational differences. The US - Germany differences (on questions not just about information) were usually less strong than the intergenerational differences.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5539.
Date of creation: Apr 1996
Date of revision:
Publication status: published as Reducing Inflation: Motivation and Strategy, C. Romer and D. Romer, eds.,(Chicago: University of Chicago Press, 1997)
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Other versions of this item:
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- The Elderly And The Political Economy Of Deflation
by Matthew Yglesias in Yglesias on 2011-06-06 20:40:56
- The Elderly And The Political Economy Of Deflation
by Matthew Yglesias in Think Progress on 2011-06-06 20:40:56
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