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Money supply has not been shown to increase inflation in recent decades. Supply chain issues have.
by standardUser 5y ago
Money supply has not been shown to increase inflation in recent decades. Supply chain issues have.
- mockingbirdy 5y agoWould love to read more about this because my understanding is that the increase in M2 money supply is a big part of the current inflation (very simplified - it's way more complex when looking at money velocity and supply chains in general).
- azth 5y agoExactly. It's obvious how printing money out of thin air induces inflation.
- irishjohnnie 5y agoCurrent inflation is mostly supply-side driven. Having said that, M2's biggest jump in its history was in early 2020 (see https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL). Its slope before and after is more or less the same. However, I don't think inflation will lag it by more than a year.
- keyboardCowBoy 5y agoMy rent went up $300 a month...is that supply-side driven?
- azth 5y agoThe last year proves this wrong.