ABSTRACT
This chapter suggests that inflation could be explained entirely as a demand-pull phenomenon. It was simply a question of too much purchasing power, or too much money in circulation, in relation to the existing or potential supply of goods and services. The simplified view of inflation as a demand-pull phenomenon is still held by the Friedmanites and monetarists who see the "easy money" policies of the Federal Reserve Board as the root of the inflation problem. These pre-Keynesians or New Rightists see no trade-off between unemployment and inflation, and their Phillips curve is therefore vertical. In the fifties, the conventional view was still that all inflation was demand-pull.
