Diercks (2019) provides a detailed analysis of work that has appeared on the issue since the mid1990s. 5  heavily into firms’ and households’ calculations, it is less likely that resources will be allocated to activities that raise the productive potential of the economy, rather than into areas that are only made attractive by the presence of high and variable inflation.
6 There are other economic costs of high inflation. In the labor market, as nominal wages are often set in advance, bouts of unanticipated inflation typically lead to a drop in workers’ real wages in the short run, and this is a burden on households in meeting their expenses. 7 More generally, even anticipated rates of inflation can produce redistributions of income.