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Sure, what you're describing is the quantity theory of money, but there are other reasons why you could see inflation given a universal income, depending on the
by Helmet 9y ago
Sure, what you're describing is the quantity theory of money, but there are other reasons why you could see inflation given a universal income, depending on the circumstances.
If you consider the velocity of money, you will almost certainly see inflation on consumer goods if the money to be redistributed would have otherwise just sat in some rich guys's savings account.
There are also inflation expectation to consider, liquidity traps, the actual demand for money, etc.
- billmalarky 9y agoI expect prices to change in order to reflect the new system, but I think people's "sky is falling" concerns about the price of consumer goods shooting up is way off base and sensationalist. UBI alone simply won't provide enough discretionary income to cause sharp increases in demand of goods. Not to mention, the type of goods that a basic income affords are those that are already scaled out and are easily scaled out - ramping up supply would happen relatively quickly in the unlikely scenario that demand for these goods does go up drastically. As I've repeatedly said in other comments, I believe demand for these simple goods will stay relatively flat since they are such fundamental necessities people are already consuming them and won't necessarily increase demand significantly (UBI won't cause demand for toilet paper to go up significantly).
- deleted 9y ago[deleted]