Edit: new and improved image, now with 100% less support! Used my expert photo editing skills to change “supporting” to say “voting for”
Edit: new and improved image, now with 100% less support! Used my expert photo editing skills to change “supporting” to say “voting for”
Inflation wasn’t caused by “printing money”, or even COVID PPP loans being unpaid. It was mainly caused by businesses realizing they controlled many aspects of people’s lives.
When people were paying $50 for some toilet paper, most daily essentials companies realized that people were willing to pay more than they expected. There are very few tp companies and not many Americans install a bidet.
Americans mostly got raises during COVID and that allowed many companies to raise prices. You always have to eat, clean your house, wash your clothes, go to the bathroom, etc. This is just the consequence of a lack of competition among companies in the US (and other countries).
I agree with you that that is a large factor, and certainly a problem, but inflation has always been very strongly correlated with the money supply; you can’t just simply ignore the “printing money” aspect of it.
No, money supply is not strongly correlated with inflation. Right now M2 is shrinking while inflation is still positive. That wouldn’t happen if they were strongly positively correlated.
https://fred.stlouisfed.org/series/M2SL#
Here’s better explanations:
https://www.nber.org/digest/20239/unpacking-causes-pandemic-era-inflation-us
Meaning “people have more money, so producers increased prices”.
We already see that there is a time lag effect, so does that actually matter?
Anyway, this disagrees with the paper you linked:
https://www.investopedia.com/ask/answers/042015/how-does-money-supply-affect-inflation.asp
It’s also curious (from reading the abstract) that the paper you linked didn’t seem to include money supply in their model? Was that deliberate?
But I’m also just generally skeptical of anything that tries to blame labor or wages for inflation.
lol at countering nber, the group that literally figures out if there’s a recession or not with investopedia.
Clown world moment.
It’s a digest of a paper co-authored by a former Fed chair, so yeah I’m a bit suspicious of the exclusion of money supply in their modeling. And like I said, I’m always more suspicious of any source that tries to blame the working class for inflation.
But sure if NBER preaches, it must be gospel.
Don’t you put that evil on me.
It’s just funny to counter one of the most institutional and official sources with one that’s a rung above clickhole.
No hate, I’m gonna fold that bit up and save it in my wallet for the right time.
Ok sure, I could’ve spent some time digging for a more academic source instead of the first result, but I try not to spend too much effort arguing with Internet randos, and just demonstrating that there is not consensus seemed sufficient.
That would have been cool lol.