The Macro Faire

When prices go up because a currency is being debased, that is inflation. It might make a social and political difference if the price increases are in milk and bread, or housing and healthcare, rather than in financial assets, but economically it is irrelevant. It reflects only what the artificial money was first used to buy (also known as the Can

Sellers will, therefore, decide to increase their prices for one of two reasons: (1) their own costs have increased and they can no longer make the desired profit or return otherwise, or (2) customers start to buy faster, such that inventory is depleted before it can be replaced, suggesting that more potential customers exist than can be serviced a

From a politicians’ standpoint, the best realistic scenario for them is that money supply growth will be high to support the deficits as needed, but that there will be enough productivity growth from AI and other areas to offset it and prevent aggregate prices from increasing too rapidly.

The problem, however, is that even if that were to happen for

The classic definition of deflation is a period of actual decline in the general price level and an economic environment that is characterized by inadequate or deficient aggregate demand.

é preciso distinguir processos de elevação persistente de preços daqueles que parecem ser acidentais (por exemplo, aumento no preço do tomate causado por problemas climáticos), da mesma forma que tentamos separar elevações pontuais de alguns preços de processos mais generalizados.