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Monetary policy

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Monetary Policy - Inflation - Costs

Theories

Inflation costs, but who does it cost? Here we look at some of the theories about the costs of inflation. Follow the links below to get more detail about the particular theory.

  • Anticipated inflation - if inflation is anticipated (expected), then the effects will be less serious than if it is unexpected.
  • Unanticipated inflation - unanticipated inflation has more serious effects as people haven't allowed for the inflation in their behaviour.