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Therefore we do not need to be trusted theories which are always put forward during the periods
Long inflations with a view of the government justification. Affirms that
The continuous rise in prices is not a consequence of the governmental policy, and result
Primary increase of costs. In reply to it it is necessary to underline that
Such phenomenon as inflation of costs (cost-push inflation) in strict sense
Words simply do not exist. Neither increase of rates of wages, nor increase
The prices for oil, even a rise in prices for import as a whole cannot lift the cumulative
The price of all goods until it is not given to buyers
Additional money for their purchase. That name inflation of costs, is
Simply result of growth of monetary weight as which the governments consider
Necessary to provide to prevent the unemployment called by increase
Wages rates (or other costs): such increase precedes
Inflations and dare at it pending that the government will increase the monetary
Weight. These measures are undertaken in hope that people can find job,
Thanks to increase of demand for their production. If the government does not increase
Monetary weight, increase of wages of any group of workers
Will lead not to overall price level growth, and it is simple to reduction of sales and,
Hence, to unemployment.
It is necessary to consider, however, hardly in more details that will occur, if cartel
Or other monopolistically organisation, such as the trade union, will become successful
Also will manage to rise essentially in the price for a significant kind of raw materials or the rate big
Groups of workers, establishing them in the currency, which stability the emitter
Aspires to save. Under such circumstances stability of an overall price level
In the given currency can be reached only decrease of some other prices. If
People should pay more money for oil or books, or printing
Materials which they buy, they will be compelled to consume less
Any other goods.
Problem of rigidity of the prices and wages
Any currency cannot eliminate inflexibility of some kinds of the prices, of course. But
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