AN OPTIMISTIC REASONING ON INFLATION

Accelerating inflation in recent years has caused suffering for many and has distorted the structure of the economy. It seems that it is neither worth-while, nor possible to completely eliminate inflation. Even otherwise highly desirable factors, like export surplus, inflow of foreign capital, eliminating former covert inflation, boost inflation. Of course, inflation has to be curbed but an anti-inflationary policy is only worth considering if it can be maintained. It follows from the nature of inflation in Hungary that classical means of demand restriction alone cannot reach even the desirable stabilizing effect, nor break the path for later growth. An anti-inflationary policy will be successful only, if by creating institutions and building up markets, it clears the way for its own assertion and offers rational alternatives for economic agents, whether companies or households.