A Critical Analysis and Comparison of Selected Models of Inflation.

The purpose of this report is to assist those who must deal with inflation related problems in acquiring a sound basic understanding of inflation. The report begins with a logical-historical treatise of monetary developments and selected experiences with inflation in various historical contexts. The evolution of money and monetary institutions as related to inflation is traced into the first half of 1976. Contemporary monetary crises under a system of floating currencies are discussed and analyzed in terms of the historical background material. The historical data base thus developed is used as a referent for analysis and comparison of theoretical models of inflation suggested by four schools of economic thought: classical, Austrian, Keynesian and monetarist. The four models are compared in terms of explanatory value, historical accuracy and predictive value.