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by skybrian 2178 days ago
Well that depends. If it's preserving spending power (you were laid off) then it wouldn't be a spending increase. The supply was already there.

Inflation is an average of price increases. You get price increases when supply can't expand as fast as demand while keeping the price of inputs the same. This depends on whether there are supply bottlenecks and what the nature of those bottlenecks are. There have been some supply bottlenecks due to deliberate closures, but mostly temporary.

In a recession, the assumption is that there is extra capacity already, particularly for labor.

1 comments

I think this thread is full of people confusing absolute inflation with relative inflation (“inflationary”). A policy resulting in zero absolute inflation can be inflationary provided that absent such policy, deflation would have occurred.

I took this with OP stating (incorrectly imho) that a certain policy was not inflationary. I am not advocating that all inflation is bad.