A central bank wants to prevent concerns about the purchasing power of money from influencing economic decisions.
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Even allowing for the difference in the purchasing power of money and the comparative flimsiness of the structure, this was a remarkable achievement.
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INFLATION _ An increase in the average price level in the economy, which if persistent leads to an erosion of the purchasing power of money.
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No matter how complex individual products become, there will always be some general sense of the purchasing power of money both across time and across goods and services.
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Both inflation and demurrage reduce the purchasing power of money held over time, but demurrage does so through fixed regular fees, while inflation does it in a variety of ways.
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For one thing, he said, they are tied to flawed government inflation indexes, " which may or may not reflect the market's judgment of the future purchasing power of money ."
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So long as individuals make contractual arrangements for future payments valued in dollars, there must be a presumption on the part of those involved in the transaction about the future purchasing power of money.
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;Hoarding : People buy durable and / or non-perishable commodities and other goods as stores of wealth, to avoid the losses expected from the declining purchasing power of money, creating shortages of the hoarded goods.
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Two versions were particularly influential, one developed by Irving Fisher in works that included his 1911 " The Purchasing Power of Money " and another by Cambridge economists over the course of the early 20th century.
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