Quantitative Easing As A Highway to Hyperinflation

This book addresses the topical issue of whether the current environment in the US and other major countries, where quantitative easing is used to boost the economy, is conducive to hyperinflation. This is a controversial and highly debated issue. Using both economics and history, the author challenged the view that quantitative easing will not lead to hyperinflation, and argued that hyperinflation, or at least high inflation, is likely to appear eventually. The books deals with a very important and contemporary issue of the possibility of a resurgence of hyperinflation. The book examines all of the propositions put forward for and against the eventuality of hyperinflation using illustrations based on actual and simulated data. It would be useful not only for policy makers but also for ordinary citizens. 1. Inflation, deflation, disinflation and all that. 1.1. What is inflation? 1.2. Inflation and related concepts: a graphical illustration. 1.3. The causes of inflation. 1.4. Experience with inflation. 1.5. More inflation-related concepts. 1.6. Concluding remarks -- 2. The measurement of inflation. 2.1. The inflation rate. 2.2. Inflation, income growth and money illusion. 2.3. Measuring the general price level. 2.4. Core inflation. 2.5. The consumer price index. 2.6. The GDP deflator. 2.7. Other price indices. 2.8. Concluding remarks -- 3. The monetary theory of inflation. 3.1. Introduction. 3.2. The meaning of money and credit. 3.3. Money creation under a fractional reserve system. 3.4. The quantity theory of money. 3.5. Facts and figures. 3.6. Further remarks on the monetary theory of inflation. 3.7. Central bank independence. 3.8. Concluding remarks -- 4. Other theories of inflation and some extensions. 4.1. Demand-pull inflation. 4.2. Cost-push inflation. 4.3. A combined demand-cost model. 4.4. Inflationary shocks, monetary accommodation and monetary validation. 4.5. The fiscal theory of inflation. 4.6. The political theory of inflation. 4.7. The other side of the coin: deflation. 4.8. Concluding remarks -- 5. The consequences and costs of inflation. 5.1. Introduction. 5.2. The "positive" effects of inflation. 5.3. Arbitrary redistribution of income. 5.4. Business planning and investment. 5.5. Miscellaneous business costs. 5.6. Distortion of the effect of taxes. 5.7. The adverse effect of inflation on saving. 5.8. The effects of inflation on financial markets. 5.9. The effect of inflation on competitiveness. 5.10. Currency depreciation. 5.11. The effect of inflation on unemployment and growth. 5.12. Inflation-triggered social unrest. 5.13. The effect of inflation on morality. 5.14. The optimal inflation rate. 5.15. Hedging the risk of inflation. 5.16. Concluding remarks This Book Addresses The Topical Issue Of Whether The Current Environment In The Us And Other Major Countries, Where Quantitative Easing Is Used To Boost The Economy, Is Conducive To The Emergence Of Hyperinflation. This Is A Controversial And Highly Debated Issue. Using Both Economics And History, The Author Challenges The View That Quantitative Easing Will Not Lead To Hyperinflation And Argues That Hyperinflation, Or At Least High Inflation, Is Likely To Appear Eventually. The Book Examines All The Propositions Put Forward For And Against The Eventuality Of Hyperinflation In The Us, Using Illustrations Based On Actual And Simulated Data. The Analysis Leads To The Conclusion That The Current Fiscal Position Of The Us Government, Particularly The Levels Of External Debt And Unfunded Liabilities, Will Not Be Rectified Without Resorting To Inflationary Financing. The Book Would Be Useful Not Only For Policy Makers And Economists But Also For Non-specialist Observers.