Some Lessons from the 1946-48 Swedish Inflation.

The main purpose of this article is to present an empirical study which is noteworthy because it accentuates and illuminates certain important aspects of inflation that are often subordinated when this leading economic problem is discussed in the United States, viz, foreign trade and the structure of international prices, supply, and physical controls. Another object of this paper is to advance the hypothesis that, given full employment and a permissive monetary policy, a mutual dependence approach to inflation transcends the "single cause" approach. As a means of organizing and interpreting the multitude of events, which lead to the several goals of this paper, an analytical framework, called the four operators of inflation, is constructed. The four operators are: the letters S. D, F, and W symbolizes supply, demand, foreign trade, and wage-price; and them, respectively. The considerations from the analysis of the 1946-48 Swedish inflation suggest that an interdependence orientation to inflation should be further developed, and that the multifarious connections among S, D, F, and F should be more systematically explored.