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"Little or no consideration has been given to the possibility that higher prices may simply be the market allocating resources and not inflation. Prices reflec
by neilwilson 5y ago
"Little or no consideration has been given to the possibility that higher prices may simply be the market allocating resources and not inflation.
Prices reflect the indifference levels where buyers and sellers meet.
If, for example, there is a freeze in Brazil, the price of coffee may go up. The higher price accommodates the transfer of the remaining supply of coffee from the sellers to the remaining buyers"
Soft Currency Economics II, Warren Mosler, pp70
- mym1990 5y agoHigher prices across the board is the market trying to allocate resources, but not being able to do so efficiently. Higher prices, by definition, IS inflation...it doesn't matter what the cause is, whether it is a freeze in Brazil or a ship getting stuck in the Suez or a war. If prices go up, your purchasing power goes down, and it is inflation.