Well I said central bank, the gov. has also given a stimulus during the pandemic -- this is a larger part of the story. However, we should be careful not just

Well I said central bank, the gov. has also given a stimulus during the pandemic -- this is a larger part of the story. However, we should be careful not just to say inflation is caused by the money supply. This is a theory of why inflation could occur, it isnt inflation. Inflation is just the general rise in prices. Given that everything is suddenly more expensive when energy prices rise (since energy is required for everything), etc. And given supply chain crises, etc. We are seeing a case where the supply-side is undergoing huge general shocks. If you want to say that M1 has caused a demand-side inflation, fine... but it seems to me that 1/2ing the price of oil would 1/2inflation; whereas doubling interest rates wont. So if money supply is the cause of inflation, interest rates will entirely solve the problem. If the supply-side is, then it wont. I'd place a large bet on supply side being the major part. I think 1/2ing oil price would take inflation down to (4-6)%, at which interest rates would then be effective.