inflation concepts

1. shoeleather cost 2.menu cost 3. relative price variable & misallocation of resources 4. inflation induced tax distortions 5.confusion and inconvinience 6. arbitrary redistribution of wealth ( the borrower wins in an infaltion and the lender loses)

• real interest rate + inflation=nominal interest rate
• reduced interest due to 25% tax (.25*nominal interest rate)
• after tax nominal interest rate (.75*nominal interest rate)
• after tax real interest rate (after tax nominal rate-inflation rate)

• m*v=p*y
• v=(p*y)/m