What Is an Inflationary Monetary Policy?

Inflation policy is an economic policy that expands the fiscal deficit and intensifies inflation to increase aggregate demand to cope with economic depression and promote economic growth. Inflation policy was characteristic of early Keynesian policy claims. It is based on Keynes's theory of effective needs. Effective demand refers to aggregate demand when aggregate supply prices and aggregate demand prices reach equilibrium. During economic depression and recession, although there can be an equilibrium of total supply and demand prices, there is unemployment and insufficient effective demand. The economic recovery can only be achieved by expanding effective demand. ^[1]