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> That doesn't actually seem like a huge achievement Historically, it has been. > Inflation is the rate of change so if you stop creating as much money out of
by JumpCrisscross 5mo ago
> That doesn't actually seem like a huge achievement
Historically, it has been.
> Inflation is the rate of change so if you stop creating as much money out of thin air, then it's not really a surprise that prices don't increase as much
You're confusing money supply and price levels. Inflation measures the latter. You can have constant money supply and stable prices, inflation or deflation. And since most money is privately created, controlling how much money is and isn't created "out of thin air" is actually quite challenging.
- mono442 5mo ago> You're confusing money supply and price levels. They're closely related. > And since most money is privately created, controlling how much money is and isn't created "out of thin air" is actually quite challenging. It's the central bank which controls the interest rates, the reserve requirement and other stuff which affects it.
- JumpCrisscross 5mo ago> They're closely related But not the same. In this case, the difference is material. > It's the central bank which controls the interest rates, the reserve requirement and other stuff which affects it Affects. But does not control. That's what makes it challenging. To my memory, a soft landing from 5+ percent inflation has been achieved precisely once in modern monetary history. (And not for lack of trying.)