| The link between monetary inflation and price inflation has been "demonstrated" by the Chicago Boys, with Milton Friedman as their guru. It led to the "monetarist" school of thought - which has been the reigning paradigm in economics since. There is no such thing as "inflation" in general. There are different types of inflation, such as the rise of the valuations of stocks, the rise of real estate price and day-to-day prices such as food. And monetary inflation. QE has led to various effects in various countries at different times. There is no absolute correlation "always and everywhere". The funny thing is that a rise in stock market is always interpreted as a positive thing - despite everybody knowing that bubbles happen very regularly. Otherwise, inflation is seen as bad - which is ridiculous since the extraordinary low interest rates kept by the FED for years ("printing money") has sustained the economic growth and avoided recession. Economists are historians of the economy. They are able to explain what happened - and if they agree on the general picture, they disagree on many points. Which is normal, that is a research field, so there are debates. Some say lessons should be learned from History... well, for sure, all other things being equal, stuff tend to repeat, but as time goes by, the other things are not equal at all - or only to a certain point. I majored in History but historians are not my first sources to predict the future. Despite having repeatedly failed at predicting anything, we can't help but ask economists to be oracles and ask them to set-up policies. |