3 ms·

Wrong, money velocity and demand (both probably go up under this scheme) can increase inflation. So can shortages caused by a big demand spike.

• bryanlarsen 5y ago
  Demand for food and housing doesn't go up with UBI, there are still the same number of people.
  • collegeburner 5y ago
    More desirable food (organic, grass fed, whatever) and more desirable housing will both have increased demand, especially short term. Also even if we hold food and housing constant, more money frees up what people formerly spent on food and housing to spend on other stuff so demand increases there. America has very high marginal propensity to consume so most of this will be spent. An additional tax that redistributes primarily will also be spent much more because poor and middle class have higher MPC than rich.
    • bryanlarsen 5y ago
      And the opposite effect happens too: UBI makes it easier to move to cheaper areas and to take the time to make food from scratch rather than relying on quick take out. Any changes will be very marginal. Fundamental demand isn't changing, it's just a redistribution of demand. Some prices will go up, some will go down, but neither will move much. Unless of course UBI isn't fully costed. Then the money supply increases and we will likely see inflation.