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Comment by phyzix5761

The $15k is being transferred from entity A to entity B. Both entities are not spending the $15k so there wouldn't be any effect on inflation. If you printed an extra $15k then that would cause inflation because both entity A and entity B would be spending $15k.

Inflation, which means a steady rise in prices overall, happens only when the total money supply in an economy grows. This increase in money, often called "printing money," can be physical cash or digital money created through lending and government policies. Without more money in the system, if prices go up in one area, they have to go down somewhere else because the total money available limits how much can be spent on everything. Sometimes prices rise temporarily due to supply problems, but that is not true inflation unless there is more money chasing goods. This key idea, highlighted by Milton Friedman in his Nobel Prize winning work, shows that lasting inflation is mainly caused by increases in the money supply.

parent phyzix5761 1 year ago

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