The standard two components of inflation are money supply + velocity of money (how often that money changes hands). Inflation is roughly defined as more dollar

The standard two components of inflation are money supply + velocity of money (how often that money changes hands). Inflation is roughly defined as more dollars chasing the same quantity of goods leading to price increases. It's clear how printing more money would lead to that, but what if the Fed prints more money and it just sits in bank accounts? Hence the velocity component -- people need to actually spend the money for inflation to come into play. The confusing thing now is that since the US has been in a liquidity trap for a long time, velocity isn't even the right measure. This is a mirror of what happened in Japan in the 1990s and is still happening today; https://www.brookings.edu/wp-content/uploads/1998/06/1998b_bpea_krugman_dominquez_rogoff.pdf https://www.brookings.edu/wp-content/uploads/1998/06/1998b_b...