Question #81447
Do you think that inflation imposes a net cost to the economy after considering the gains and loss?
Expert's answer
Inflation can be considered as an additional tax, paid an economic agent. This tax is realized in devaluation of a national currency and growing prices. On the other hand, this tax is not gathered by a government and directed on social needs. That is why inflation can be really considered as a net cost for a national economy. In th end, it is realized in devaluation of a national currency, growing prices and finally recession.
