4 ms·
Adding trillions to the money supply, of course, has no impact whatsoever?
by gibsonf1 5y ago
Adding trillions to the money supply, of course, has no impact whatsoever?
- martinko 5y agoEconomists would argue that the 'printed' money is actually reserves at the central bank, and thus has no impact on price levels. I myself am less certain about the overall dynamics.
- whimsicalism 5y agoPeople understand that inflation is a function of both money supply and velocity right? Well I guess no, as almost every comment on this thread seems to have no idea. https://fred.stlouisfed.org/series/M2V https://fred.stlouisfed.org/series/M2V
- wbsss4412 5y agoMoney supply, velocity, and GDP growth* Just wanted to add, if all else is held equal amount those factors, growth in gdp, without and subsequent changes in the money supply or velocity, would lead to deflation.
- whimsicalism 5y agoYep! Price Level = Money Supply * Velocity / Real GDP If you improve real output without an increase in money supply or velocity, things'll get cheaper.
- dragonwriter 5y ago> Money supply, velocity, and GDP growth consumer price level should be proportional to Money supply × velocity ÷ (real GDP + value of net consumer imports)