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by Experimentalist
5734 days ago
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No, inflation is not only in people's minds, it's a real measurable monetary phenomenon. Sellers can raise prices but if there is not enough money to pay the price then no transactions occur, The sellers would then have to lower their price to sell the items. In other words an increasing rate of inflation throughout the economy can only occur if there is enough money/credit available to pay the higher prices. You need more money available, an increasing money supply. What's wrong with this NPR article is for everybody to think a "cheap trick" is what made it work. No, the tight fiscal policies (ie balanced budget) enacted by Brazil at the same time made it work. The ideas in this article, coupled with Krugman's debt default idea is sending you down a river to a waterfall. |
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