PRINTING MONEY GOES HAYWIRE IN VENEZUELA, Megan McArdle writes:

The core thing to understand about inflation as a policy tool is that in general, steady-state inflation doesn’t do you any good; what you need is accelerating inflation. A little bit of inflation is actually OK — it allows the economy to naturally cushion economic shocks that would otherwise lead to unemployment. In the dark ages of economics, some people got the idea that if a little bit of inflation was good, more must be even better: Set the printing presses to “full stun” and enjoy perpetually higher economic growth. (You still see this folk economics circulating on the Internet from time to time.) But this doesn’t work. People start to expect the inflation, and the economy returns to its natural level of output, except that everyone’s savings are now worth less. To get more growth, you have to inflate even faster than you did before.

Unfortunately, once inflation starts to accelerate, it’s kind of hard to stop because people also start pricing the acceleration into their expectations.

“Hyperinflation has all sorts of bad knock-on effects,” McArdle adds. Well, it certainly has in the past.