If inflation lowers demand, would that not eventually offset inflation naturally without government intervention?

Question

If inflation lowers demand, would that not eventually offset inflation naturally without government intervention?

In: 42

Answer 1

That’s one of the possible outcome but people might also start using a different currency instead (e.g. what happened to Venezuela and Turkey).

At the end of the day, governments don’t want to lose control of their currency, as they would no longer be able to influence the economy with fiscal policy.