“Money” in a modern society therefore comprises cash and deposit money, and is reliant on the confidence of the public that bank deposits can be converted into cash at any time.
Second, when growth is relatively rapid, supply-side inflationary pressures do spill over into more generalized inflation, presumably reflecting high pricing power of all producers, including workers. The implications of this for monetary policy are quite clear and direct: if there are signs of spill-over from supply-side to core, then a monetary response is warranted to prevent the process from spiralling out of control.