Quote:
Originally Posted by ilkhan
No it is not. Inflation has to do with prices.
If the money supply doubles and the population doubles during that same period ceteris paribus - there will be ZERO inflation.
No Drama is correct Inflation IS money creation.
Mearly being fixated on price increase and ignoring money creation is what fouls most Keyenesiens up.
Inflation IS a tax and it always attacks the poor and middle class the worst.
I do see your point controling though Zero inflation, It goes with supply and demand.
IMO
Here is a short read on the subject from the Misses institute If you care to delve into it.
Just FYI to see what we are talking about.
http://mises.org/story/908
Some people, long dead, would be so amazed at the really lively debates we have about economics.
On the internet Laymen, Keyenisian, and Austrians even Chicago school. Its weird to think about...
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Please explain how the example below would lead to inflation.
If the money supply doubles and the population doubles during that same period ceteris paribus.
This is a shift in supply and demand for dollars both proportionately to the right. You CAN increase the money supply without creating inflation. They are USUALLY tightly related concepts but inflation is different than an increase in the money supply.
If the money supply did not increase with an increase in population there would be a shortage of money. Imagine if the US had the same amount of money in circulation as we did in the 1800's!