If inflation lowers demand, would that not eventually offset inflation naturally without government intervention?
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One factor I didn’t see mentioned already is one of the big factors that leads to runaway or hyper inflation. If people expect inflation it can lead to inflation.
As an example, you notice your washing machine is getting older and will need replacing soon. Prices are high so normally you would push your existing machine as long as it could go (reducing demand) to stretch your budget. But if you expect the price of washing machines to go up by 50% over the next year then you might just replace the machine today (increasing demand) and find a way to make it work. In a high inflation scenario, everyone is making these decisions on all types of purchases which forces high inflation to actually occur. This can get bad enough that people aren’t just doing this with big infrequent purchases, but instead people feel the need to immediately cash and spend their entire paycheck as soon as they get it since it is quickly losing value as soon as it hits their bank account. (This second scenario is when inflation has reached Venezuela/Weimar republic levels not just 10% a year)
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