3 ms·

Can you explain what you mean by "artificial inflation"? For example, much of the 1970s inflation was caused by a spike in energy prices because of an oil embar

• mindslight 3y ago
  I would call that real inflation, as it's the market responding to an external event, even though that event is human-made. Artificial inflation is what we had for the past three decades where even though resources were plentiful and things were getting less expensive to produce (eg offshoring, technology), prices were still going up a few percent per year because the Fed's mandate is to artificially create even more new money to prevent the deflation bogeyman. In other words "moving production to Mexico/China may cost us some jobs but will be made up for by lower prices for everyone" was ultimately a lie due to Fed policy making lower prices impossible.
• maxsilver 3y ago
  Most people use the term "artificial inflation" to reference the price of products going up for no real-world reason, or when the company lies about the reason. (As in, the price increase is explainable entirely -- or almost entirely, in higher margins for the company), but that the company blames on "inflation" anyway. If "Company X" is publicly saying "our prices are higher because of inflation", but you can also clearly see that their costs are not meaningfully different and their margins are higher, simply because the market has no alternative but to eat them, that's "artificial inflation".