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Investing in an economy increases production. If productivity increases, but currency circulation remains the same (or at least doesn't outpace productivity), t
by bkanber 6y ago
Investing in an economy increases production. If productivity increases, but currency circulation remains the same (or at least doesn't outpace productivity), the value of the currency will increase. This is only one of the various modes of inflation, but that's the idea w.r.t infrastructure spending.
- perl4ever 6y agoI follow up until the last sentence. If the value of the currency increases, then that's deflation. So you explained reasonably lucidly why we should expect what I guess we agree didn't happen.
- bkanber 6y agoI was describing deflation on purpose, because deflation [is supposed to] happens after solid infrastructure investment. My last sentence was misleading because I said "this is one of the various modes of inflation", but what I really meant was "this is one of the various modes of an inflationary/deflationary economy".