People in the US believe that if inflation eases, for example from 4% to 3%, that means that prices are going to go back down to what they used to be before inflation started rising. They furthermore believe that if that does not happen it is proof that the media is lying.
Politicians love communicating about 2nd and 3rd derivatives of prices and debt in ways that even mathematically literate people have trouble immediately interpreting. There's a famous quote about Nixon doing it but it's honestly the current standard mode from all sides trying to avoid blame for the state of the deficit and monetary supply.
This is something being debated across the world. I'm not american and in my country economists wages war over the "inflation is the result of monetary expansion". I know nothing about it, the only thing i know is that inflation is getting worse (almost) everywhere.
The money goes faster on the top side of the wing, which means the money underneath the wing is more compressed, lifting up both sides of the wing. This is known as the "trickle-down" theory of lift.
Yeah no, economists and a lot of people understand the the causes of inflation. There are economists who are paid very well to not understand it though, and such positions are often high in the government and financial sector hierarchies.
We've had a dozen instances of massive money printing since the 80s but no significant inflation until we had the COVID supply side shock. Now we're getting inflation because of tariff uncertainty, also a supply side shock.
Friedman is wrong, inflation is primarily caused by supply side shocks.
It's more complicated than that (lending also increases the money supply) though you're right that "printing money" loosely speaking is the primary irreversible driver.
"Inflation" simply refers to a rise in general price levels. The cause of inflation is known: someone sets a price.
There isn't a single reason why someone might raise a price. It could be that they have some ideology about the size of the money supply (i.e. "printing money") or it could be that the costs of their inputs went up ("inflation") due to tariffs, or other supply chain problems. Or it could be a cynical bet that the market would bear a higher price ("using inflation as an excuse").
Blaming inflation on this-or-that cause is most definitely a political rather than theoretical exercise.
throw__away7391|5 months ago
_--__--__|5 months ago
kattagarian|5 months ago
OgsyedIE|5 months ago
taneq|5 months ago
Eddy_Viscosity2|5 months ago
dennis_jeeves2|5 months ago
To me the answer is very simple, the primary (not sole) driver is govt printing currency indiscriminately.
bryanlarsen|5 months ago
Friedman is wrong, inflation is primarily caused by supply side shocks.
throwawaymaths|5 months ago
esseph|5 months ago
bithive123|5 months ago
There isn't a single reason why someone might raise a price. It could be that they have some ideology about the size of the money supply (i.e. "printing money") or it could be that the costs of their inputs went up ("inflation") due to tariffs, or other supply chain problems. Or it could be a cynical bet that the market would bear a higher price ("using inflation as an excuse").
Blaming inflation on this-or-that cause is most definitely a political rather than theoretical exercise.
argentinian|5 months ago
You are not offering an argument about why can't it be investigated.