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Reflections on Money and Inflation

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Current forecasts for inflation suggest that recent high monetary growth rates will not cause a resurgence of inflation. Economist William T. Gavin reviews the historical connection between money and prices. The upward inflationary trend common to all the nominal variables was broken in 1981. Since then, the monetary trend has continued to rise while inflation has declined. Gavin discusses the implications of this anomaly for the inflation forecasts.


Suggested citation: Gavin, William T. “Reflections on Money and Inflation,” Federal Reserve Bank of Cleveland, Economic Review, vol. 20, no. 1, pp. 02-06, 03.01.1984.

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