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Why would we have stagflation and not just stagnation? A slowing economy would only slow money velocity.
by JamesBarney 7y ago
Why would we have stagflation and not just stagnation?
A slowing economy would only slow money velocity.
- 01100011 7y agoI dunno... seems if we've injected money into the economy it's out there swirling around. As long as the velocity is high, everything is fine. If the economy slows, we lose velocity and with a fixed supply of money(or an increasing supply, if QE is attempted) we see inflation as too many dollars chase too few goods. I never did well in econ though, so I'm happy to be told I'm an idiot.