Inflation induces people to spend more resources maintaining lower money holdings. This is called shoe leather costs.

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When inflation rises, people increase their spending to avoid keeping too much cash on hand, which reduces their purchasing power. This leads to increased transaction costs of time and effort spent on going to the bank for withdrawals or using other means to reduce their cash holdings, which is referred to as shoe leather costs.

Inflation Induces People to Spend More Resources Maintaining Lower Money