Two theoretical arguments why a high level of inflation is bad (e.g. for growth) are:
- shoe-leather cost: keeping lower money balances when inflation is high (implying more frequent trips to the bank/ATM).
- menu cost: time and effort to change price lists in an inflationary environment
Are there any empirical studies that measured these two costs? (And I mean measure them separately from the slower growth due to inflation, which in itself is somewhat controversial, e.g. Barro (1995) vs Emara (2012).)