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Inflation is everywhere and always a monetary phenomenon. Cool website though!
by GreedClarifies 3y ago
Inflation is everywhere and always a monetary phenomenon.
Cool website though!
- bryanlarsen 3y agoRegularly requoting Friedman doesn't make it true. You're confusing cause and effect. Inflation can be fixed by adjust the money supply, but it may or may not have been caused by money supply.
- GreedClarifies 3y agoWay better than inventing ad-hoc stores that support people's biases.
- bryanlarsen 3y agoThe correlation between supply shocks and inflation is higher than the correlation between loose monetary supply and inflation.
- arduanika 3y agoYou're correct in that not the requoting that makes Friedman's dictum true. It's the basic math. The aggregate price level is equal to the money supply, times the velocity of money, divided by the volume of transactions. The duty of monetary policy is to size the money supply accordingly. When the central bank fails in that task, or is overwhelmed by fiscal recklessness, you get inflation. Everywhere and always. By "phenomenon", he's not talking about the proximal cause; he's talking about the policy point of failure. And it sure as heck has zero to do with excessive javascript and Google search trends.
- bryanlarsen 3y agoSure, if the Fed is prescient. There's lag in the system, so to prevent inflation the Fed would have to predict supply shocks several months in advance.
- mp05 3y agoI'm no economist but... grabs macroeconomics book from shelf Yeah it's definitely more than just monetary phenomena. I'd argue that bad fiscal policy makes it happen and jiggering the money supply is what we do to fix mistakes by terrible leadership, but that's certainly also an oversimplification.