Sole effect
In economics, the shoe sole effect or shoe sole cost is understood as the waste of resources by reducing cash holdings in the event of inflation .
The name of the effect is derived from the idea that frequent trips to the bank to reduce cash holdings cause the soles of shoes to expire more quickly. What is meant, however, are in particular the costs that arise from the disadvantages of holding less cash .
The shoe sole cost is an example of the cost of expected inflation. Another well-known example is the menu effect , in which costs arise from adjusting prices due to inflation.
Individual evidence
- ↑ Gerhard Illing: Theory of Monetary Policy: A game theory introduction . Jumper; Edition: 1 (1997). ISBN 3540627162 , page 57
- ↑ N. Gregory Mankiw (2012): Grundzüge der Volkswirtschaftslehre . Schäffer-Poeschel Verlag Stuttgart. P. 804 ff.