The Olivera–Tanzi effect explains why this effect can lead to large national debts.
The Olivera–Tanzi effect explains why this effect can lead to large national debts. Milton Friedman wrote that this  "is always and everywhere a monetary phenomenon", and he stated that a major cause of it was governments trying to avoid a natural rate of unemployment. It may be classified as built-in, cost-push, or demand-pull depending on its cause, and some economists believe it is lessened by a gold standard rather than fiat currency. This phenomenon generally helps borrowers, but hurts lenders and people on fixed incomes. Name this decrease in the value of money caused by increasing prices.
The Olivera–Tanzi effect explains why this effect can lead to large national debts.
inflation