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ANTI‐INFLATION INCENTIVES
Author(s) -
Lerner Abba,
Colander David
Publication year - 1982
Publication title -
kyklos
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.766
H-Index - 58
eISSN - 1467-6435
pISSN - 0023-5962
DOI - 10.1111/j.1467-6435.1982.tb01214.x
Subject(s) - economics , inflation (cosmology) , incentive , monetary economics , keynesian economics , macroeconomics , microeconomics , physics , theoretical physics
SUMMARY Inflation occurs because individuals have an incentive to raise prices. The key issue of anti‐inflation policy is to choose the appropriate incentive to stop inflation. Monetary policy works through the hunger incentive and it is no longer effective because society no longer allows the hunger incentive to work. This paper argues that the appropriate incentives to stop inflation are market incentives. These market incentives can be built into society through the introduction of an incentive anti‐inflation plan such as the authors’ MAP proposal or its TIP counterparts.