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Inflation in the form of government spending on infrastructure or wealth transfers to poorer citizens is not 'clearly' bad, there's significant academic debate
by thurn 4y ago
Inflation in the form of government spending on infrastructure or wealth transfers to poorer citizens is not 'clearly' bad, there's significant academic debate on the subject. Disincentivizing cash-hoarding drives economic growth, and has done so for the past 50 years.
- zamalek 4y ago> Disincentivizing cash-hoarding And the reason why this is important is because an asset that is not liquid has no utility as a currency. Put another way, if my $1 today would be worth $1.20 tomorrow, it would be in my best interest to "HODL" on to it instead of using it. This would be a fantastic scenario for me as an individual, in the short term. Eventually, though, I'd have to buy some bread; the problem is that the baker decided to HODL their currency instead of buying flour (because that would be in their own best interest). Everyone would be sitting on heaps of unusable wealth.