A Kerry Landslide?

Washington Monthly ^ | 4/6/04 | Todd

[arthurus]

The "structure" of the economy has no bearing at all on real inflation. Inflation is the increase of the stock of money, period. Price inflation occurs when that increase is more then the demand for liquidity- money in the market- by actors in the system. Actual inflation is beneficial insofar as the money supply- liquidity- increases at the same rate as the demand.We went through several years of nominal price decline even as inflation continued because the rate of increase in dollars was less than the rate of increase of production.

[boxsmith13]

"The "structure" of the economy has no bearing at all on real inflation"


Actualyl it does. Today the economy is much more competitive thanks to de-regulation. After 9/11, airlines cut fares. If 9/11 occurred in a regulated environment, airlines would have gone to the CAB and asked for a fare increase.

Prior to the early 1980s, it was quite easy for firms to pass through costs increases to consumers, today it isnt


In the end inflation is always andeverywhere a monetary phenomenon