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Are there any studies exploring links between basic income and inflation? Will prices of essentials move up because of a sudden appearance of purchasing power o
by dman 12y ago
Are there any studies exploring links between basic income and inflation? Will prices of essentials move up because of a sudden appearance of purchasing power on part of the entire population?
- yen223 12y agoThere was an experiment done in a small town in Canada: http://en.wikipedia.org/wiki/Mincome http://en.wikipedia.org/wiki/Mincome
- loumf 12y agoProbably the best natural experiment is to look at what happened on the introduction of Social Security in the US and the analogous programs in other countries. We should also realize that we can't just give net $xx,000 each to the entire population. The proposals usually fund BI with taxes on the higher earners. Spending should increase (as we move money from savers to spenders), but most (or much) of the population will be either near-neutral or pay extra taxes more than BI.
- nicholas73 12y agoBasic income would be negligible to inflation, except for medium ticket discretionary items. Deflationary for luxury goods. This is because basic income benefits the poor but increases taxes on the rich. The poor would be able to afford lower middle class items. The professional middle class would see a wash in taxes vs. BI. Basic necessities would show no change because items like food and housing are already being consumed at nearly the rate the population could handle. Sure maybe steak prices go up a little, but rice would get cheaper too. Maybe less people would be homeless but some more houses could be built and find a buyer/renter too. Bottom line: inflation is related to the total amount of money in the system. Basic income only re-distributes money. Sure temporary slowing and speeding of money flow can affect inflation, but let's consider the long term average.