Contact Us
Write for Us
Request an Article
ROM Economics » Theories and Basics » Shoe-Leather Cost Explained
Shoe-Leather Cost Explained
January 20, 2018
Quick Definition: A shoe-leather cost describes the cost to individuals who have to take frequent visits to the bank to take out more money for goods and services in periods of high inflation. The name ‘shoe-leather cost’ comes from the fact that walking to the bank more regularly will wear down your shoes.
Also known as:
Shoe-leather costs of inflation
What is a shoe-leather cost?
A shoe-leather cost is one of the impacts of inflation.
In a period of high inflation people are discouraged to hold large amounts of cash because its value deteriorates quickly relative to the rising prices in the economy.
As a result, people tend to hold most of their money in a bank account and keep only very small amounts of cash with them. This causes them to make regular trips to their bank to withdraw cash to pay for goods and services. These regular trips wear out their shoe-leather, thus creating a ‘shoe-leather cost’.
The shoe-leather cost is now used more generally to describe all the costs associated with having to hold small amounts of cash.
Key terms
Merit Goods ExplainedPoverty Trap Explained
Posted in Theories and Basics | Comments Off
What is ROM Economics?
ROM Economics is a resource for deciphering all the basic concepts, theories and key terms in economics and also helps clarify the latest economic news in order to make economics a subject people can appreciate.
Dictionary of Economics
A dictionary full of definitions for every key term, theory and concept in economics.
Contact Us
If you have any feedback for the website please contact us using our contact form.
Write for Us
We are looking for talented writers who have an interest in economics to contribute to this fast-growing website. Accepted applicants will take up a voluntary writing position on the website … Read More
Request an Article
We are looking for talented writers who have an interest in economics to contribute to this fast-growing website. Accepted applicants will take up a voluntary writing position on the website … Read More
Privacy Policy Terms and Conditions Site Map
© 2019 ROM Economics
HomeTheories and BasicsHistoryBiographiesNews and OpinionEconomics Dictionary