High inflation linked to economic downturn, wage decline, and trade boost.
The study looked at how high inflation affects economies by analyzing 23 cases in 17 countries. It found that high inflation can cause a drop in GDP, investment, and jobs. Real wages also decreased significantly, while the value of money went down and external trade improved. These effects are in line with theories that emphasize the importance of money in transactions. However, some findings, like the big decrease in real wages, don't fit existing theories well.