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> As a result of the Cantillon Effect, inflation can be seen as a non-legislative and regressive tax on the purchasing power of citizens by the government. I'm

> As a result of the Cantillon Effect, inflation can be seen as a non-legislative and regressive tax on the purchasing power of citizens by the government. I'm not an economist, but, I was under the impression that "the economy" is more complex than this, and that inflation is not really the fault of "the government", even if you could come up with a theoretical way for "the government" to "fix" inflation at its own whim From Wikipedia: Changes in inflation are widely attributed to fluctuations in real demand for goods and services (also known as demand shocks, including changes in fiscal or monetary policy), changes in available supplies such as during energy crises (also known as supply shocks), or changes in inflation expectations, which may be self-fulfilling. Doesn't sound like "the government" is applying this "tax". It sounds like there is a systemic event happening re: supply/demand, combined with the system responding to human emotions

lurking15 3y ago
There's an entire economic school of thought that believes that inflation is essentially entirely a monetary phenomenon. Dollars are tokens, and governments dispense those tokens whenever they need to finance themselves, every empire eventually succumbs to the temptation to pump out tokens instead of being productive and disciplined in their expenditures and delaying consumption (in other words, saving). This precedes every downfall. It seems useless to me to call inflation a matter of the changing price of a good that will change due to demand or supply. Rather, intuitively what really matters is if someone is switching up the measuring stick that forms the basis of the entire price signaling system of the economy.
readthenotes1 3y ago
The government can quite easily cause inflation by creating money, something that others have trouble doing. The people that get the money then typically buy more stuff. Rich people buy artwork and yachts, poor people buy bread and eggs. Not surprisingly prices rise where people buy.

lurking15 3y ago

There's an entire economic school of thought that believes that inflation is essentially entirely a monetary phenomenon. Dollars are tokens, and governments dispense those tokens whenever they need to finance themselves, every empire eventually succumbs to the temptation to pump out tokens instead of being productive and disciplined in their expenditures and delaying consumption (in other words, saving). This precedes every downfall. It seems useless to me to call inflation a matter of the changing price of a good that will change due to demand or supply. Rather, intuitively what really matters is if someone is switching up the measuring stick that forms the basis of the entire price signaling system of the economy.

readthenotes1 3y ago

The government can quite easily cause inflation by creating money, something that others have trouble doing. The people that get the money then typically buy more stuff. Rich people buy artwork and yachts, poor people buy bread and eggs. Not surprisingly prices rise where people buy.