> Unlike the stimulus, much of which went to businesses and governments.
However, business and governments didn't drive up the price of macaroni. However, the $4500 the government gave my family probably did.
However, business and governments didn't drive up the price of macaroni. However, the $4500 the government gave my family probably did.
People bought food and therefore cost of food went up?
So, following this logic, we have enough people who are regularly not getting enough food that when they can, it kills the economy?
I...honestly if that's the actual reason this is happening then it seems like we should be looking at seeing how do we make it so everyone has food and produce food with that metric. Not with a lower metric and be fine with people hungry.
Fascinating.
Giving everyone more money for the same supply of goods is the very basis of inflation.
In Monopoly, if you give 1 player $500 they get a big advantage. If you give every player $500... nothing happens other than all auctions go up.
> I...honestly if that's the actual reason this is happening then it seems like we should be looking at seeing how do we make it so everyone has food and produce food with that metric. Not with a lower metric and be fine with people hungry.
This is exactly the point. If your goal is 0% inflation, the supply of money needs to be tied to actual economic growth. If the economy makes less stuff (like, during a pandemic) you actually need to find ways of taking money out to keep prices stable.
(And the relationship between money supply and inflation would be covered in 101, not 102)