Inflation is socially destructive, creates abnormally high unemployment, misuses economic resources, and endangers human freedom not because value-judgements lead man to seek these consequences but because errors in scientific judgement have prevented them from seeing the consequences in advance. These consequences can therefore be corrected by the clearer understanding yielded by (‘positive’) economic analysis.

Simultaneously rising inflation and unemployment can conceivably both be due to a common cause, but experience in Britain, Canada and Itlay suggests that they may be reacting on, and intensifying, each other, so that faster inflation may, at least for a time, intensify unemployment.

Occasional Paper No. 51

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