4 ms·
Inflation really is all about transferring money from those who create to those who produce. Those who create are called workers and those who produce entrepren
by jhoechtl 5y ago
Inflation really is all about transferring money from those who create to those who produce. Those who create are called workers and those who produce entrepreneurs. Once the creators buy something they are consumers. As a side note: Ironically those who consume are the ones who created it before, therefore Marx thought it would be natural that the working class should be in control.
You want to create positive inflation so the creators have a an incentive to consume because prices in next year a higher than today.
You want to create positive inflation which is not to high as otherwise prices for life-essential goods (energy, water, basic food) increase and a higher proportion of the available income has to be spent on this goods instead on consumables.
The right amount of inflation is dependent on many, many, many factors, for one the availability of cheap energy. Many factors in the model to economic growth are feed-back therefore small changes to one factor can create large effects up to point where the system becomes erratic (chaotic)
See the IS-LM model https://en.wikipedia.org/wiki/IS%E2%80%93LM_model https://en.wikipedia.org/wiki/IS%E2%80%93LM_model , assuming that interest rate and inflation are directly dependent.