[thinkingemote]

Do prices rise when consumers have more money to spend? Is consumer inflation tied to employment rates? Does inflation slow when poverty grows?

Intuitively it kind of makes sense that everything would get more expensive but if you consider millionaires spending on stocks, the stocks don't rise in price when the millionaires get more money, they are kind of independent. I think the same for poor people. Prices shouldn't rise because more people can afford to buy something but it makes sense that some would rise prices as more people will be able to afford the product. I guess the market and competitors is meant to keep prices down.

[simonh]

Price is driven by the relationship between supply and demand. More money to spend means increased demand (assuming it isn't all saved), but if supply can increase to meet it that doesn't necessarily mean prices have to rise. If there are bottlenecks in the supply chain yes prices could go up, but also efficiencies of scale can even push prices down depending on the product.

Regardless of any change in prices of those goods there will be more economic activity to meet the demand. That economic activity comes from somewhere and could increase costs, and therefore prices elsewhere in the economy. So I think some inflation is inevitable.

The rise in stock prices since the pandemic crash is largely driven by the increase in the money supply. That money sloshing around has to go somewhere, and it's poured into stocks. This is because people aren't spending as much in the lockdown, so the excess money is going into savings.

[Guthur]

This feels very much like a false dichotomy. Many millionaires, I assume we mean the extremely wealthy, have the majority of their wealth tied to the extreme growth of stocks based on some extreme economic forces. E.g. bezos with Amazon, Bill gates with Microsoft etc. And so some how comparing that to standard consumerism seems a little off.

[thinkingemote]

Yeah the millionaire thing feels off to me, but the idea behind it.... Do prices for consumer goods rise when there are more consumers?

Do things rise in price when the people who usually buy the things have more money?

Are things more expensive in more populated areas or less?

[imtringued]

Come on, that is basic supply and demand. The only confusing part is that inflation is often considered to be it's own independent thing and it can be controlled exclusively through e.g. the central bank when that's really not the case.

Consumer inflation = price of consumer good increases

Consumer deflation = price of consumer good decreases

demand exceeds supply = price of consumer good increases

supply exceeds demand = price of consumer good decreases

Now use these four basic definitions to answer your comment.

>Do prices for consumer goods rise when there are more consumers?

more consumers = more demand

UBI = less people work = supply stays the same or goes down

In this scenario "demand exceeds supply" is true. Prices do rise and that rise is called inflation.

>Do things rise in price when the people who usually buy the things have more money?

Again. UBI = less people work = supply stays the same or goes down

more money = more demand

People may buy more than one product if they can afford it or they may buy a higher quality one.

In this scenario "demand exceeds supply" is true again. Prices do rise and that rise is called inflation.

If you were to introduce price controls and set a maximum price for TVs then it is possible that one person buys 3 TVs and two other people can't get a TV at all. The answer is to raise the prices until everyone who wants a TV can get one.

>Are things more expensive in more populated areas or less?

Well, it depends on what "things" you are talking about.

A UBI does not influence the amount of land available so the supply of land would be fixed but the amount of money being received through UBI grows with a greater number of people.

supply = stays the same

demand = increases as more people live in a community

Therefore we see inflation in land prices.

If you were talking about something like an iPhone that can be manufactured in China and then shipped to New York then no, it would not cause inflation because denser populations do not prevent the Chinese (or any other company that's operating outside your city) from building bigger factories and thereby increasing supply to match demand.

supply = increases with demand

demand = increases as more people live in a community

[AdrianB1]

Do people learn the basics of economy in schools these days? This matter is well explained there, much better than a HN comment can do it.

[imtringued]

>Do prices rise when consumers have more money to spend? Is consumer inflation tied to employment rates? Does inflation slow when poverty grows?

Pretty much, but that's not a flaw of UBI, that's how the economy works and if the amount of UBI is picked carefully by skilled economists it would be very easy to achieve the desired amount of inflation. Everyone is somehow scared of inflation because we have been in deflation or at least near zero inflation for at least a decade.

[blueterminal]

> Prices shouldn't rise because more people can afford to buy something.

Of course they should, and they would. It's really econ 101. More demand = higher prices. Why wouldn't it?

If you were selling apples for $1/kg, and you have it sold daily very rapidly, wouldn't you try to make $1.1/kg? $1.2/kg? $2/kg? Until you can't sell everything you produce, or, more precisely, until you can't make more profit.

[tonyedgecombe]

Only when supply is constrained.

If a grocer tried to double their prices then their competitors would out compete them.

Property in SV might be a different matter although I’m guessing this is going to be cost neutral for most people there or even negative.