Top 2 Alternative Strategies to Reduce Inflation (With Diagram)

The following points highlight the top two Alternative Strategies to Reduce Inflation. The Strategies are: 1. Gradualism 2. Cold Turkey. Reducing Inflation Strategy # 1. Gradualism: A policy of gradualism, shown in Fig. 13.11(a), attempts a slow and steady return to low inflation. The gradualist policy starts with a small reduction in the money supply growth rate that shifts the [...]