Here’s something that someone cleverer than me will explain to me: how can there be inflation at a time of declining incomes? I mean, if people don’t have money they will not buy and if they don’t buy, prices must fall, not increase?
Milton Friedman, the great monetary economist, said inflation happens when money supply grows faster than the supply of goods and services. That certainly is happening globally, except perhaps in China, but who knows what really happens there.
However, Friedman also said that people spend now according to a sense they have of their lifetime earnings.
Milton Friedman, the great monetary economist, said inflation happens when money supply grows faster than the supply of goods and services. That certainly is happening globally, except perhaps in China, but who knows what really happens there.
However, Friedman also said that people spend now according to a sense they have of their lifetime earnings.
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