Money as the Ability and Inflation

Mehdi Chowdhury ()
Additional contact information
Mehdi Chowdhury: Bournemouth University

Chapter Chapter 7 in Money and Inflation, 2024, pp 79-92 from Springer

Abstract: Abstract The chapter establishes the relationship between inflation with money defined as the ability to obtain goods and services from others. It starts with pointing to the fact that though inflation is regarded as a major problem; studies specific to inflation are limited, even within the discipline of economics. The chapter discusses the economic analysis of inflation, and demonstrates its insufficiency, as it only looks at aggregate price levels, and as such is not applicable to economic systems with many heterogeneous entities comprising of sectors, regions, families, and individuals. Inflation is instead a problem of distribution that impacts different segments of an economy differently through uneven changes of the money, i.e. ability. The book then discusses that the changes in the price level are better explained by the changes in the bargaining power, and thereby the balance of money, i.e. the ability of various segments of the economy. The balance is impacted by non-market issues, the stored ability, and the ability to borrow from the future. A change in the balance implies that individuals may find them requiring to utilise more of physical and mental power to create the ability to acquire goods and services. Inflation thereby is the need to utilise more body and mind to create the ability, i.e. money to acquire a wide range of goods and services.

Keywords: Inflation; Quantity theory of moneyQuantity theory of money; Phillips curvePhillips curve; Demand-pull and cost-push; Non-market; Stored ability; Borrowed ability; Distribution (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-52356-4_7

Ordering information: This item can be ordered from
http://www.springer.com/9783031523564

DOI: 10.1007/978-3-031-52356-4_7

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().