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by Ma8ee 4778 days ago
It's not that simple, which the current economic situation proves. The US government has increased the amount of money several times over since the beginning of the current crisis, but the inflation is still very low. In other words, printing money isn't inflationary in the current situation. The reason for that is that the increased amount of currency doesn't manage to decrease interest rates (since it is already about zero) which normally increase demand, and without increased demand to drive increase of prices no inflation. When the economy is working "as normal" the situation is very different. Then increased availability of currency increases demand which drives the prices up. But we aren't there now.