Hacker News new | ask | show | jobs
by whimsicalism 1708 days ago
People understand that inflation is a function of both money supply and velocity right?

Well I guess no, as almost every comment on this thread seems to have no idea.

https://fred.stlouisfed.org/series/M2V

1 comments

Money supply, velocity, and GDP growth*

Just wanted to add, if all else is held equal amount those factors, growth in gdp, without and subsequent changes in the money supply or velocity, would lead to deflation.

> Money supply, velocity, and GDP growth

consumer price level should be proportional to Money supply × velocity ÷ (real GDP + value of net consumer imports)

Yep!

Price Level = Money Supply * Velocity / Real GDP

If you improve real output without an increase in money supply or velocity, things'll get cheaper.