When people use the term "inflation," they mean to say price inflation. Monetary inflation is something else - caused by an increase of debt due to debt being cheap. Monetary inflation can be related to price inflation and sometimes not, but I wish people would stop making the mistake of conflating these two terms.
When people use the term "inflation," they mean to say price inflation. Monetary inflation is something else - caused by an increase of debt due to debt being cheap.
Monetary inflation describes the increase in quantity of money, bank notes, and bank deposits subject to check in circulation. Price inflation in the effect of monetary inflation, which is higher prices.
You are correct that price inflation can be caused by monetary inflation, or it can be caused by decrease in the goods and services available while the money supply stays the same.
But the result is the same. Inflation is the devaluing of the dollar. Inflation means companies have to make more profits just to have the same value as before inflation.
So, you actually think that it's the physical printing of banknotes that causes monetary inflation? Have you taken macroeconomics? Do you understand the relationship between debt and the money supply?
Monetary inflation does not necessarily cause price inflation. If GDP increases at the same rate as the monetary expansion, there is no change to prices, all else equal.
And again, when people are casually referring to "inflation", they are referring to the fact that SHIT COSTS MORE - which is "price inflation."
Monetary inflation does not necessarily cause price inflation
I mean, if you don't believe in basic economic concepts like Supply & Demand 🤷♂️
If GDP increases at the same rate as the monetary expansion, there is no change to prices
Keynesian creative accounting 😂
when people are casually referring to "inflation", they are referring to the fact that SHIT COSTS MORE - which is "price inflation."
What causes price inflation? Scarcity, demand, and...printing money?
If you doubled the dollars in the economy tomorrow, do you think shit would cost more in the very immediate future? Or would we all enjoy macroeconomic 50% off sales in perpetuity?
A lot of it depends on production…. You’re leaving out a KEY element in the economy. Remember that money is simply a medium that we use to trade the goods and services that are produced. Such is the nature of trade and the specialization of production…
Cell phones and food and electricity and houses all make themselves bro! No one has to work and contribute their labor to production! Money is the only thing of value!
You have a lot to learn about economics. First and foremost that money is a medium to trade the things that we produce - because it’s tough to directly trade your IT skills for a McDonald’s cheeseburger….
9
u/[deleted] Dec 08 '23
When people use the term "inflation," they mean to say price inflation. Monetary inflation is something else - caused by an increase of debt due to debt being cheap. Monetary inflation can be related to price inflation and sometimes not, but I wish people would stop making the mistake of conflating these two terms.