4 ms·
The main cause of inflation is the artificial restriction of supply on certain items from govt/business. Housing isn't expensive because of the cost of labor/m
by quaquaqua1 7y ago
The main cause of inflation is the artificial restriction of supply on certain items from govt/business.
Housing isn't expensive because of the cost of labor/materials, for example. It's expensive because the government literally says "you can't build that here". So the 100 old parcels of land where you want to live have 1000 people bidding for them.
UBI maybe on paper would cause additional inflation in that scenario. But it might also be the catalyst that allows people to move elsewhere for work, such as to a low cost of living area, because UBI can be relied on to survive.
- rapsey 7y agoThat sounds like a pet theory someone in the bay area comes up with. No economist I’ve read has any such opinion.
- quaquaqua1 7y agoPlease explain to me how you view how reality works then. I'm not related to SF in any way btw. The total legal occupancy of SF is smaller than the number of people who want to live there. The city delays the issuance of permits for expanding occupancy.
- rapsey 7y agoIncrease in the money supply and velocity of money. The money supply has increased dramatically and is why the bull market has been so long. However velocity is very low which has so far limited inflation. UBI would thus likely cause significant inflation. The bay area is rich and the rents follow suit. They are still limited to the overall supply of money in the area. Obviously increasing supply of real estate would help the issue of course.
- sak5sk 7y agoExcept no new money supply is created, hence little to no inflation.