repressed inflation meaning
[Economics]
A situation in which price and wage increases are restrained by official controls. This is liable to lead to a burst of increases when the controls are relaxed, unless policies are adopted to remove excess demand pressure. A serious difficulty in ending repressed inflation smoothly is that in conditions of widespread excess demand and controlled prices, nobody actually knows how much excess demand there really is, or how much any given price would rise if controls were removed.
A situation in which price and wage increases are restrained by official controls. This is liable to lead to a burst of increases when the controls are relaxed, unless policies are adopted to remove excess demand pressure. A serious difficulty in ending repressed inflation smoothly is that in conditions of widespread excess demand and controlled prices, nobody actually knows how much excess demand there really is, or how much any given price would rise if controls were removed.
Examples
More: Next- Western economists called this " monetary overhang " or " repressed inflation ".
- He pays less attention to the case of repressed inflation and considers underconsumption / unemployment a theoretical curiosity.
- It suffered from both open and repressed inflation throughout much of its history because of failure to balance the above equation.
- A vicious cycle began : repressed inflation encouraged the informal economy, thus reducing tax revenues and leading to higher deficits and even higher inflation.
- He left behind an unfinished manuscript called " The German Mark " that has lain unpublished in the archives ever since . ( Kindleberger and Ostrander say that it is brilliant on the nature of repressed inflation .)
