This chapter discusses causes of inflation.

a. Do you believe the cause of inflation is to be found in the institutional structure of wage- and price-setting institutions or in excess demand for goods and services?

b. If you believe inflation is caused by wage- and price-setting institutions, what type of policy would Keynesian and Classical economists recommend?

c. If you believe that inflation is caused by excess demand, would their policy recommendations be the same? (Post-Keynesian)