[andreilys]

Is there any evidence that increasing the money supply causes inflation?

Yes, basic logic. Central banks purchasing assets like index funds, bonds, etc. will naturally cause prices to rise.

I’m not entirely sure how you can steel man an argument that printing trillions of dollars will not lead to higher inflation but I’m happy to hear it.

[mywittyname]

Sorry, this simple argument fails because central banks have been doing this for 15 years, and 13 of those years they were complaining about a lack of inflation. Ergo, the current inflationary environment is not the result of central bank activities.

A bunch of things have changed in the past few years, which could trigger inflation. A massive pandemic that continues to kill millions every month, lock downs in China that curb the ability of the world's largest producer of goods to produce goods, a war in Europe which has caused a massive energy crisis.

So where I'm sitting, basic logic exculpates central banks.

[gr1zzlybe4r]

If the pandemic were truly killing millions of people every month then by this point we'd've seen a dip in the global population.

[rnk]

Maybe not millions a month but excess deaths are a real thing. That's from loss of treatments bc of the covid impact on the entire worldwide health system, as well as people getting sick or weakened from covid, and then people dying from covid directly. Last cal year: about 5 mil covid deaths, about 15 million more people died than expected (aka excess deaths) - so 10 million more on top of covid https://www.who.int/data/stories/global-excess-deaths-associ....

This other paper has more breakdown. Search for "estimated cumulative excess deaths", 15-25 million through Sept 2022. It's ballpark but it's not insignificant. https://ourworldindata.org/excess-mortality-covid

[mister_tee]

Agree with it being a combination of many factors on both supply and demand side, but I feel we can't exclude the unprecedented and massive amounts of financial intervention.

I'm not a wonk here but have heard the argument that QE from 2012-2019 was partially to keep deflation at bay. Meaning, QE and ZIRP _did_ increase inflation, even if the result was reaching the target 2%.

The scale of increasing money supply and QE also was much larger this time. Before 2009 Fed balance sheet was under $1T. Actions taken during and around the GFC increased it to $2.1T. During the last couple years they grew it by $5T, and it maxed out just under $9T.

https://www.federalreserve.gov/monetarypolicy/bst_recenttren...

[missedthecue]

Don't think that's true. Look here at this graph of the money supply. There is a visible change in the money supply after covid hits and stimulus starts. It has not been going on like that for 15 years.

https://fred.stlouisfed.org/series/M1SL

[nicoburns]

> and 13 of those years they were complaining about a lack of inflation

I think this was mistaken. There has been huge inflation over those 13 years, it's just been in specific asset classes like houses rather than general goods.

[echoplex]

Bingo. It’s completely idiotic to think there was no inflation. Nobody complained when the stock market doubled. Some people complained when the house market doubled. Everybody complains when energy prices double.

[notch656a]

Only dumb peasants that weren't long on leveraged energy futures complain when energy prices double. Check-mate, poors.