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Inflation

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Inflation is generated by an excess of money. Following the logic of supply and demand, if there is a lot of money, there will be demand for goods, which will push prices up. However, withdrawing money from the system will have also negative consequences.

They discuss about inflation and deflation in this podcast episode of Planet Money: Inflation, Deflation, but they do it from a purely monetary perspective. I wonder why it becomes so complicated to explain and to act upon.

Tags: #economics


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