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monetary overhang


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That part of the money supply that people are holding merely because they have not been able to spend it. In an economy with repressed inflation, people hold more money than they really want, because shortages of real goods and services make it impossible to spend it as they would wish. If the controls which kept inflation repressed are removed, monetary overhang tends to produce a burst of open inflation.

Subjects: Social sciencesEconomics


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