Shoe leather cost

Under the effect of shoe sole or shoe sole cost is understood in economics, the waste of resources by reducing the cash balances with inflation.

The name of the effect derives from the notion that the soles are quickly passed by frequent way to the bank to reduce the cash balance. However, refers in particular to the costs incurred by the disadvantages of lower cash holdings.

The shoe sole costs are an example of the costs of expected inflation. Another famous example is the menu effect when generating the cost by adjusting of prices, as a result of inflation.