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Money and Inflation: A Taxonomy

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  • Matias Vernengo

Abstract

This paper reviews the various explanations for inflation and the relation between inflation and money aggregates. Two analytical distinctions are useful to understand different explanations of inflationary processes of all types. First, and more importantly, theories can be seen as cost-push or demand-pull theories of inflation. Second, the distinction between exogenous and endogenous money supply is important for a proper taxonomy of inflation theories. This second analytical cut results from the fact that there is a clear empirical connection between inflation and monetary stock measures. A tentative taxonomy is presented at the end, allowing an evaluation of the dominant view on money and inflation and the main counter points from a heterodox perspective.

Suggested Citation

  • Matias Vernengo, 2005. "Money and Inflation: A Taxonomy," Working Paper Series, Department of Economics, University of Utah 2005_14, University of Utah, Department of Economics.
    • Handle: RePEc:uta:papers:2005_14
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    Cited by:

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    2. Esteban Pérez-Caldentey & Matías Vernengo, 2007. "A Tale of Two Monetary Reforms: Argentinean Convertibility in Historical Perspective," Working Paper Series, Department of Economics, University of Utah 2007_01, University of Utah, Department of Economics.
    3. Nicolás Cachanosky & Emilio Ocampo, 2023. "Is inflation caused by conflict?," CEMA Working Papers: Serie Documentos de Trabajo. 852, Universidad del CEMA.

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    More about this item

    Keywords

    Inflation; Macroeconomic Schools;

    JEL classification:

    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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