Inflation, Money and the Role of Fiscal Arrangements: an Analytic Framework for the Inflation Problem

A persistent and world-wide inflation has attracted public attention. The space allotted in newspapers and the efforts invested in political rhetoric or the rapid succession of policy programmes reflects the general concern. The public discussion also produced a remarkable array of ideas and beliefs bearing on the inflation problem. This array can be usefully classified into three major groups according to the following two criteria: (i) the dependence or independence of price movements with respect to current and past evolutions of market conditions, and (ii) the occurrence or non-occurrence of a dominant impulse pattern driving the inflationary process.