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Comment by itsoktocry

>but for me there should be two types of inflations 1. a dilution of money

Outside of the fact that "some people say" (generally anti-fed types) that inflation is an increase in the money supply, why is it you think that?

In economics inflation has a specific definition: a general rise in the price level. It can be caused by all kinds of things. A rapid rise in the money supply is one. A breakdown in available supply is another.

>Let say a central bank injects a lot of new money, then all prices will be higher, but salary will be higher too

Maybe, maybe not. There's economic theory around the stickiness of wages; they don't react as quickly as the prices of goods. And that's understandable. It's easy to raise wages, but difficult to reduce them.

parent itsoktocry 4 years ago

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