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Because monetary policy is only one of a multitude of factors that influence inflation. Regulations, subsidies, tax laws, trade agreements, labor laws, immigra
by StanislavPetrov 8y ago
Because monetary policy is only one of a multitude of factors that influence inflation. Regulations, subsidies, tax laws, trade agreements, labor laws, immigration policy are just some of the other things that have wildly disjointed effects on industries, markets and prices.
- TheTrotters 8y agoYou're confusing inflation with rising real prices. Inflation doesn't discriminate -- the price of everything rises by the same proportion.
- jack9 8y agoHe's not confusing it. > the price of everything rises by the same proportion Due to regulation, that's simply not the universal case - e.g. rent control. The economy is conceptual, but prices are concrete leading to some ironic situations.
- philwelch 8y agoInflation is when the currency itself loses market value. There's no such thing as inflation that only affects some goods and not others. The prices of some goods do fluctuate relative to each other, but that's not inflation!