5 ms·
What's the ELI5 version of how to interpret this trend line?
by jgust 4y ago
What's the ELI5 version of how to interpret this trend line?
- whimsicalism 4y agoThe basic Fisher equation of exchange is that Velocity * Money Supply = Price Level (changes in this are inflation) * Economic Output During early pandemic, velocity tanked because people were spending less so it was not a foregone conclusion that increasing the money supply as much as the Fed did would lead to inflationary changes in the price level. Now, we are seeing velocity somewhat rebound while output is not increasing as much as we would expect and the Fed is doing little to scale back money supply.
- jgust 4y agoThanks for the education!