Of the following, the best criticism of the argument above is that it overlooks the possibility that certain factors operating in the 1980’s but not in the 1970’s diminished people’s incentive to save and invest.
If these other factors, unrelated to the inflation rate, that operated in the 1980’s but not the 1970’s, created an even greater disincentive to savings and investment than high inflation rates provide, then those trends do not provide evidence about the general relationship among savings, investment, and inflation.
