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When additional government spending doesn't lead to inflation, one obvious reason is that it is utilising what would otherwise be excess unused/idle capacity in
by caf 6y ago
When additional government spending doesn't lead to inflation, one obvious reason is that it is utilising what would otherwise be excess unused/idle capacity in the real economy.
It's only when the spending exceeds the amount of otherwise idle capacity that inflation occurs, as too much money chases too little real production.
It's evident that the economic shocks this year have idled a great deal of economic capacity.