In economics, they actually teach that inflation causes economic actors to choose not to defer purchases, and that that is good for the economy because it increases spending. This is at least partially wrong, and I'm amazed it wasn't obvious immediately.
First, it's questionable whether anyone actually chooses to buy now rather than later for fear if inflation. When you want or need something, do you rush to do it before inflation makes it more expensive? If you live during a hyper inflationary period, sure, but not normally. And that behavior actually makes inflation worse, and is often the trigger that pushes high inflation into hyperinflation. But maybe you're buying some production input in bulk and want to lock in the price by using futures contracts, like when a chemical company buys a shipload of oil, or a cereal company buys a shitload of oats. Is that motivated by a desire to beat inflation? No, its motivated by a desire to have predictable prices. And besides, any futures contract has a seller as well as a buyer - sellers are likewise motivated by a need for predictability, not a need to move production forward to beat inflation, and even if either side was motivated by inflation, the other side cancels it. Upward price pressure from demand is cancelled by downward price pressure from selling : if net more buyers enter the market, upward pressure pushes prices up, but that logic doesn't apply to inflation because inflation is a trend, a long term phenomenon, and is subject also to suppliers responding to the increased price by supplying more. Some goods certainly are more price inelastic than others, where there are greater hurdles to supply expansion, so if purchases of such goods are pulled forward, there will be inflation in that sector, but then you have to answer the question of whether those prices will sustain the upward trend or if they'll pause and wait for the rest of the economy to catch up, assuming there's some rational equilibrium (which is itself a shaky proposition sometimes).
Second, its questionable whether bringing purchases forward is actually "good for the economy" (in quotes because: what does that actually mean?) Supposing that inflation actually does bring purchases forward, how long can that be sustained? There is an assumption that the economic actors have some reservoir of savings, either their own savings or the borrowed savings of others, with which they can increase their spending. But that's probably mostly wrong too, since a company sitting on cash is forgoing opportunities. But that logic can't be applied only partially - it must also be applied to debt. If a company is able to borrow, its rational to do so, as long as expected returns from an expansion of operations exceed the cost of the debt. Since the first (and possinly only) axiom of economics is to assume that economic actors are rational, then it follows that all actors are tapped out and at their limit for borrowing. Then it follows that they can't respond to an expectation of inflation with earlier or more spending. If there are some that, for whatever reason, needed to see that inflation to start behaving rationally, then it must be outliers, unless you think you can invalidate the first principle and foundation of economics.
But let's suspend our disbelief and suppose that this phenomon of purchases moving forward actually occurs - is it "good for the economy"? Well, if debt is being used to make the purchases, then you are moving debt accumulation forward as well as purchases. What's the cause of recessions? Its debt. Businesses reach the rational limit that they can borrow, and stop borrowing. Since the purpose of taking on debt it to expand operations, it follows that a recession is when businesses stop expanding operations, and it follows that debt has reached its maximal growth for the current size of the economy. Now, if its rational to take debt as long as there's a return greater than that debt's interest, then the point where businesses stop taking new debt is when new operations have zero return. And the cost of debt increases the more you already have (yes, its nonlinear, I know you can get more credit as a consumer the more you have) - creditors are also rational economic actors, and avoid lending to someone likely to default, and the highly the chance if default, the higher return they'll need to be persuaded to take the risk. So, you have to assume that businesses are at or near their limit for borrowing - not that its impossible to borrow more, but that its not rational to to so, since its likely that the interest expense will exceed returns. Now, what happens when sales slow? Then they're losing money, since the debt they used to expand was based on an expectation of future returns. And now you want to add to that, the proposition that expectations of inflation cause actors to buy (meaning borrow) more now rather than later? Instant recession. This is not how I would define "good for the economy."
Conclusion : its hogwash. Inflation does not accelerate purchases or the economy as a whole. Its a bold faced lie. Future note : deflation (also slows the economy). Other future note : it would be better to incentivize saving than spending, and having an I nation target instead of a savings target is utter idiocy.
