Shoe Leather Costs

Shoe Leather Costs are those "stickiness" costs borne by an Economy due to general price inflation (see Money Is Make Believe) which is the loss of value of money over time. You can check the Wikipedia::Shoe_leather_cost page for more information, but there are three main parts to shoe leather costs:

1. People must waste productive effort on minimising their cash holdings (e.g. by keeping more of their cash in a savings account) which ties up money and therefore interrupts economic activity.
2. People must waste productive effort on more frequently updating price lists and notifying these to consumers (see Wikipedia:Menu_costs) or indeed in learning/negotiating constantly updating price lists. However, people adapt to this surprisingly easily and thus one experiences a problem of Wikipedia:Adaptive_expectations whereby people begin to automatically factor in price rises into their bargaining.
3. Economic consensus holds that general price inflation interferes with efficient capital allocation by increasing uncertainty of moving capital or earning wages e.g. if you sell an unproductive factory you might worry about being stuck with the money in cash due to some hold up and therefore losing a significant proportion of that cash, or if you are a wage earner you might worry that pay increases would not keep up with rises in the cost of living which might decrease worker morale. A lot of this is in fact due to regulatory constraints e.g. you would be in legal hot water if you temporarily put that money into the stock market in order to keep its value, and most governments strongly discourage index linking wages as it leads to inflationary expectations. A lot more of this problem is due to the greediness of the banks who only pay decent interest rates on savings accounts and not on current accounts - were they mandated to pay equally for what they borrow from customers, much of this problem goes away. However, most of this problem actually stems not from the rate of inflation itself, but rather the usual volatility in price inflation during times of substantial price inflation - uncertainty by definition stems from what you are unsure of.