Re:Federal Reserve pledges asset purchases with no limit to ...
by samsonradu on Monday March 23, 2020 @05:23PM
(#22668920)
My 2 cents on low inflation:
- Inflation gets 'exported' along with production to countries with lower manufacturing costs (because globalization). So no inflation but no working class either, resulting in income inequality - a problem of its own.
- Depending on jurisdiction, inflation should include or adjust the weight of house prices (Eurozone), education costs, medical costs. These are goods that cannot be outsourced, hence they reflect higher inflation.
- Shrinkflation - https://www.economicshelp.org/blog/24369/inflation/shrinkfla...
Re:Federal Reserve pledges asset purchases with no limit to ...
by Nasrudith on Monday March 23, 2020 @10:07PM
(#22671127)
Printing money in itself doesn't - it is how the supply meets the demand. Devaluation requires a relative increase vs the economy. Distribution of money also affects how much inflation would take place.
Driving inflation up from low is a nominal goal of QE but the magnitude varies.
I know that's what the macroeconomics 101 textbook says, but is there any empirical evidence this actually drives higher inflation?
We've had historically low inflation for over a decade now[0], a decade during which the Fed has undertaken successive rounds of QE to the tune of $40-$85 billion per month.[1]
[0] https://www.usinflationcalculator.com/inflation/historical-i...
[1] https://en.wikipedia.org/wiki/Quantitative_easing#US_QE1,_QE...