3 ms·

> And it's important to realize that the inflation is a one-time event What's the basis of that? The UBI is on-going, and inflation has a tendency to "stick".

• crazygringo 3y ago
  Yes, the UBI is on-going, but it's a one-time shift in income levels, which is what generates the one-time inflation. The extra money keeps on getting spent each year -- it doesn't affect the economy in a cumulative way. The person who used to have $0, and now has $10K to spend this year, still only has $10K next year, and still only has $10K the year after. Inflation would only continue if that person received $10K in year one, $20K in year two, $30K in year three, etc. And inflation is a complicated thing, but it doesn't tend to stick when its causes are known, and known to be temporary. Inflation is governed by expectations, and those expectations are often unknown. In the case of UBI, it's extremely known. (Also remember that the UBI is not new money injected into the economy -- it's generally proposed as redistribution in the form of taxation. Which according to the simplest theory wouldn't generate any inflation at all, but because of the resulting shifts in consumption patterns, that's what generates the one-time inflation among basic consumer goods, housing, etc.)
  • hnfong 3y ago
    I see. Makes sense (at least for first order effects). Thanks!