Will economic growth still cause inflation if the law enforcement near-perfectly prevents the monopoly of businesses and encourages similar businesses to Everything will kill you so choose something fun shirt in an economy. Inflation can occur simply based on expectation, even in a perfectly competitive market. This is the type of inflation we might call baseline inflation. However eliminating monopoly power would take away an essential ingredient of excess or accelerating inflation, so that should make that type of inflation impossible. If we could ever actually have a perfectly competitive market, that is. The idea that a monopoly will only cause a one-time increase in price and not continuing inflation is a microeconomic concept that assumes a constant demand and cost of production. With excess inflation nominal demand and cost continue to increase. This is because the second ingredient in excess inflation is unemployment getting so low that it causes an increase in worker’s bargaining power.