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It certainly does not have everything to do with it. The answer is somewhere in the middle. Cheap money absolutely causes inflation, but so do global supply cha
by colinmhayes 5y ago
It certainly does not have everything to do with it. The answer is somewhere in the middle. Cheap money absolutely causes inflation, but so do global supply chain breakdowns.
- mindslight 5y agoIMO rather than talking about ambiguous "inflation", one should be specific about what exactly is being inflated - "monetary inflation", "asset inflation", "price inflation", etc. Monetary inflation occurred when the Fed printed several trillions of dollars back in 2020, asset inflation occurred soon thereafter, and then price inflation took hold throughout 2021 as that new money trickled into consumers' hands. It doesn't particularly make sense to call the current rising oil price inflation (that would make "inflation" just a synonym for price increases), but the price of energy going up will cause broad price inflation down the line.
- colinmhayes 5y agoUnless I know I'm talking to an economist I use inflation to mean price inflation, because that's what every non economist thinks it means. You are certainly right that it's ambiguous in a technical sense though.
- chasd00 5y ago> but so do global supply chain breakdowns i would believe supply chain issues were major contributors to inflation if wages were not rising. It seems to me a supply chain problem causes price to go up but wages would not. The price increase by the retailer is there to pay for their price increase to the wholesaler, not to increase employee wages.