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Another perspective on the effects of inflation uncertainty.

The relationship between inflation uncertainty and real economic activity has been a topic of considerable interest, and the couple the theoretical and empirical literatures have produc a certain number of conflicting results. For example, a certain quantity of authors suggest that inflation uncertainty restores the rate of investment by the agency of hindering long term contacts or by the agency of increasing the option value of delaying an irreversible investment. Similarly, a certain number of argue that inflation uncertainty, to the expansion that it is associated with increased relative price variation, brings the allocative efficiency of the price combination of parts to form a whole (1) In contrast, Dotsey and Sarte (2000) present to view that inflation variability may increase investment from one side its impact ...


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