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This is exactly why the de-facto monetary policy of 2% inflation needs to be rethought.
by staplers 9y ago
This is exactly why the de-facto monetary policy of 2% inflation needs to be rethought.
- AnimalMuppet 9y agoI'm not sure that the 2% inflation is related at all to population changes. It's a change in the value of money, not in the total supply of money.
- randomdata 9y agoBut at the same time value is the intersection of supply and demand. All else equal, an increase in the supply of money does decrease the value of money. Granted, all else is rarely equal.
- jcfrei 9y agoI don't know all the economic reasons for a 2% inflation rate. But one of them is to disincentivize the hoarding of currencies and making investments in assets like bonds, treasuries or equities more appealing. So you probably want some amount of inflation to always remain.