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Inflation erased U.S. income gains last year

(www.wsj.com)
177 points JumpCrisscross | 2 comments | 09 Sep 25 19:44 UTC | HN request time: 0.427s | source
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argentinian ◴[09 Sep 25 22:18 UTC] No.45190101[source]▶
Do people in the U.S. have a good understanding of the causes of inflation?
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OgsyedIE ◴[09 Sep 25 22:26 UTC] No.45190196[source]▶
Not even most economists do, by analogy to how opaque the questions of lifting bodies and rayleigh scattering are to physicists.
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Eddy_Viscosity2 ◴[09 Sep 25 22:31 UTC] No.45190266[source]▶
Yeah no, economists and a lot of people understand the the causes of inflation. There are economists who are paid very well to not understand it though, and such positions are often high in the government and financial sector hierarchies.
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chrisco255 ◴[10 Sep 25 00:26 UTC] No.45191500[source]▶
Are these the same Fed economists that claimed the elevated inflation levels were transitory in 2021?

There are multiple schools of thought on causes of inflation, but generally I agree with late Milton Friedman that it is "everywhere and always a monetary phenomenon". Money supply expansion growing faster than GDP expansion causes inflation.

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triceratops ◴[10 Sep 25 03:36 UTC] No.45192912[source]▶
If prices rise because of supply and demand, that's not inflation but something else?
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1. Eddy_Viscosity2 ◴[10 Sep 25 14:56 UTC] No.45198714[source]▶
If a bank issued you a loan for $100M, that money is effectively created out of thin air. If you then use that to buy a bunch of properties, you are increasing the demand. If others are doing this as well, prices will go up as people bid against each other for the limited supply of properties. This is inflation, because the new demand is directly caused by the creation of new money.
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2. triceratops ◴[10 Sep 25 17:46 UTC] No.45201222[source]▶
That's begging the question. Inflation is always due to higher money supply. Higher money supply increases demand which increases prices and that's inflation.

It ignore other factors that impact demand and supply.