Does Printing Money Create Inflation?
2024-08-12
The Libertarian Party candidate for governor of North Carolina posed this question on Twitter a few days ago:The question is poorly worded, but that is mainly the fault of the way the term “inflation” has fared in common parlance. Ross probably got the poll results he desired – he was trying to reinforce the idea that increasing the supply of money results in higher prices. The issue, however, is that those who understand that relationship are also usually the ones who think inflation ought to refer to increases in the money supply. For them, the question reads, “Does increasing the money supply create increases in the money supply?” The answer to the question now depends on how one interprets “create” instead of one’s understanding of economic cause-and-effect. Indeed, many of the