4 ms·

Why wouldn't inflation swell up to soak up the UBI? If I'm a landlord in a poor(er) area of town, charging $500/mo for an apartment, and UBI is $1000/mo, then

Why wouldn't inflation swell up to soak up the UBI? If I'm a landlord in a poor(er) area of town, charging $500/mo for an apartment, and UBI is $1000/mo, then why shouldn't I raise my rent to, say $1000/mo because my tenants now have extra money? (Ignore rent-control for now).

bdamm 11y ago
Indeed this would seem to be the case. I don't know how well this translates to a country like Finland, where there are a lot of social programs/controls in place already. I would really like to see a strong analysis of the inflation consequences of UBI.
arebop 11y ago
Inflation is generally believed to be caused by an imbalance between the quantity of money and the goods & services in the market. BI per se doesn't change the money supply; it can be done by redistribution of existing money rather than debasing the currency.
- 1024core 11y ago
  I would disagree. If, for example, I take $1B each from every billionaire in the SV (for a total of, say, $20B) and gave each resident of SV (say, 2M residents) an extra $10,000, won't the prices go up? People will go on a spending spree, buying up TVs and cars and games, driving up their prices? There is a reason why gas costs more in SF than in, say, San Mateo.
  - arebop 11y ago
    Then perhaps TV prices will go up, but jet prices will go down. That sort of mixed change in prices is not consistent with the usual definitions of "inflation." Do you still like your argument when you think about quartiles rather than comparing the top 20 data points against the bottom 2 million? I think it's hard for most people to trust their intuitions about the spending habits of billionaires.
dllthomas 11y ago
Because of competition. And not just of identical units, but also of alternative living arrangements and other more indirect substitutes. If I'm being charged $500/mo to live in my apartment, then moving in with my parents or some friends saves me $500/mo. If all the landlords raise rents $1000/mo, then sharing a space saves me $1500/mo, some of which can go to making that shared space more comfortable.

bdamm 11y ago

Indeed this would seem to be the case. I don't know how well this translates to a country like Finland, where there are a lot of social programs/controls in place already. I would really like to see a strong analysis of the inflation consequences of UBI.

arebop 11y ago

Inflation is generally believed to be caused by an imbalance between the quantity of money and the goods & services in the market. BI per se doesn't change the money supply; it can be done by redistribution of existing money rather than debasing the currency.

1024core 11y ago
I would disagree. If, for example, I take $1B each from every billionaire in the SV (for a total of, say, $20B) and gave each resident of SV (say, 2M residents) an extra $10,000, won't the prices go up? People will go on a spending spree, buying up TVs and cars and games, driving up their prices? There is a reason why gas costs more in SF than in, say, San Mateo.
- arebop 11y ago
  Then perhaps TV prices will go up, but jet prices will go down. That sort of mixed change in prices is not consistent with the usual definitions of "inflation." Do you still like your argument when you think about quartiles rather than comparing the top 20 data points against the bottom 2 million? I think it's hard for most people to trust their intuitions about the spending habits of billionaires.

dllthomas 11y ago

Because of competition. And not just of identical units, but also of alternative living arrangements and other more indirect substitutes. If I'm being charged $500/mo to live in my apartment, then moving in with my parents or some friends saves me $500/mo. If all the landlords raise rents $1000/mo, then sharing a space saves me $1500/mo, some of which can go to making that shared space more comfortable.