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The Inflation Question โ€“ Matt Bruenig Dot Com

  • Article
  • Dec 30, 2021
  • #Economics
Matt Bruenig
@MattBruenig
(Author)
mattbruenig.com
Read on mattbruenig.com
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One explanation is that consumer demand increased a lot because people are using their pandemic transfer payments and pandemic savings to buy goods and services. Producers have resp... Show More

One explanation is that consumer demand increased a lot because people are using their pandemic transfer payments and pandemic savings to buy goods and services. Producers have responded to this demand in part by ramping up production, e.g. by adding 5.8 million jobs in the last 12 months. But producers have not been able to increase output enough to satisfy all of the new consumer demand at existing prices. Thus producers have increased prices, which is also called inflation.

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Noah Smith @NoahSmith ยท Dec 30, 2021
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Good post challenging some of the less plausible explanations for inflation
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