> Inflation is good.
inflation is good for net debtors and bad for savers.
> Inflation comes from a imbalance in supply and demand
price inflation is a necessary consequence of monetary inflation.
> This increase in prices serve as signaling to determine where to invest in capacity.
thats actually how malinvestment occurs. people see a lot of money flooding in, and think that is a demand for capital investment, but then when their customer base dries up they realize it was an artificial stream of money that shifted with the political winds.
> Prices is how agents communicate in open markets
this is true
> a slight inflation is a message that there is unmet demand.
a gradual increase in prices is a sign that more dollars are chasing the same amount of goods, ceteris paribus.
> But this is all basic economics...
not sure that condescension is warranted. basic economics distinguishes between price inflation as a result of monetary inflation and price increases due to other reasons.
inflation is good for net debtors and bad for savers.
> Inflation comes from a imbalance in supply and demand
price inflation is a necessary consequence of monetary inflation.
> This increase in prices serve as signaling to determine where to invest in capacity.
thats actually how malinvestment occurs. people see a lot of money flooding in, and think that is a demand for capital investment, but then when their customer base dries up they realize it was an artificial stream of money that shifted with the political winds.
> Prices is how agents communicate in open markets
this is true
> a slight inflation is a message that there is unmet demand.
a gradual increase in prices is a sign that more dollars are chasing the same amount of goods, ceteris paribus.
> But this is all basic economics...
not sure that condescension is warranted. basic economics distinguishes between price inflation as a result of monetary inflation and price increases due to other reasons.