#Economics
#AllYouNeedToKnow

The axiomatically correct macroeconomic Law of Supply and Demand ⇓ tells one how ― in the elementary case ― the avg price P moves under the condition of market clearing as a function of avg wage rate W, inverse avg productivity R, and deficit-spending/money-creation i.e. the expenditure ratio ρE>1. So (with ρE=1, ρD=0 for the moment), if W rises faster than R one gets inflation and if R rises faster than W one gets deflation. The ideal case is macroeconomic price stability i.e. W and R move in lockstep. Deficit-spending, i.e. ρE>1, produces a one-off price hike.

Conclusions
1. The Quantity of Money is NOT among the price determinants.
2. Inflation rarely happens by accident but has to be engineered. This holds always and everywhere for HyperInflation.

Milton Friedman never understood how the economy works.
#Economics #AllYouNeedToKnow