Working Paper: CEPR ID: DP1821
Authors: Jose Vinals
Abstract: This paper addresses a number of questions which are essential to a proper understanding of the causes and effects of the inflationary process and to an assessment of the contribution of monetary policy to the achievement of long-term price stability. These questions are: (1) what are the economic costs of inflation? (2) what part does monetary policy play in the short- and medium-term evolution of inflation? (3) what are the most appropriate monetary policy strategies for fighting inflation?
Keywords: Monetary Policy; Inflation; Costs of Inflation; Strategy
JEL Codes: E42; E52; E58
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| inflation (E31) | economic growth (O49) |
| monetary policy (E52) | inflation (E31) |
| rate of monetary expansion (E50) | inflation (E31) |
| inflation (E31) | uncertainty and volatility (D89) |
| uncertainty and volatility (D89) | economic costs (D61) |
| lack of credibility (D83) | higher inflation rates (E31) |
| inflation (E31) | deteriorating economic growth (O49) |