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Inflation Control and Political Considerations

Published online by Cambridge University Press:  05 August 2009

Extract

ToTheAverage American the experience of continuously rising prices in the midst of a business recession is a puzzling phenomenon. He has generally been led to believe that the operation of the economy is fundamentally subject to impersonal market forces, and that when demand falls market prices willalso fall and thus re-establish the balance between supply and demand. By the same token, this faith in the effectiveness of impersonal market forces has prevented the typical citizen from seeing the practical danger of continued inflation. Many have felt that prices could not continue to rise indefinitely without generating the decline in demand which would bring prices down.

Type
Research Article
Copyright
Copyright © University of Notre Dame 1959

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References

1 Wall Street Journal, August 25, 1958.

2 American Economic Review, (1950), 505–538.

3 Ibid., 505.

4 Ibid., 536.

5 Fishman, Betty G. and Fishman, Leo, “Public Policy and Political Considerations,” Review of Economics and Statistics, XXXIX (1957), 457462CrossRefGoogle Scholar.

6 Bach, George L., “Inflation in Perspective,” Harvard Business Review, XXXVI (1958), 101Google Scholar.

7 Galbraith, John K., “Market Structure and Stabilization Policy,” Review of Economics and Statistics, XXXIX (1957), 130Google Scholar.

8 Burns, Arthur F., Prosperity Without Inflation, (New York 1957), p. 75Google Scholar.

9 Ibid., pp. 41–42.