No. of Recommendations: 19
There's only ever 1 reason for inflation:
The government prints too much money, increasing its supply relative to demand of goods and services.
Again, this is Econ 101 stuff.That's not true. There can be lots of reasons for inflation - exogenous increases in demand, exogenous increases to the cost of supply, taxes or surcharges or tariffs or other governmental costs that get factored into the cost of production. All of those things can cause inflation.
They might not have covered that in your Econ 101 (they certainly did in mine, back when I got my econ degree), but it certainly would have been in Econ 102. If you want a refresher, Investopedia has a handy summary. The relevant bit:
Economists classify inflation into three main types: cost-push inflation, driven by rising production costs; demand-pull inflation, caused by strong consumer demand; and built-in inflation, which results from expectations of ongoing price increases. Higher wages, increased demand, and government fiscal policies can all fuel inflation. Central banks closely monitor these trends and may adjust interest rates or monetary policies to keep inflation in check.investopedia.com - What causes inflation and does anyone gain it
