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However, while more disputed in the 1970s, surveys of members of the American Economic Association (AEA) since the 1990s have shown that most professional American economists generally agree with the statement "Inflation is caused primarily by too much growth in the money supply", while the same surveys have shown a lack of consensus by AEA ...
[1] [2] Money supply data is recorded and published, usually by the national statistical agency or the central bank of the country. Empirical money supply measures are usually named M1, M2, M3, etc., according to how wide a definition of money they embrace. The precise definitions vary from country to country, in part depending on national ...
For the 12-month period ending in August 2022, the annual inflation rate was measured at 8.3% for the United States. This means the price of everyday essentials such as food, gas and living ...
Monetary inflation is a sustained increase in the money supply of a country (or currency area). Depending on many factors, especially public expectations, the fundamental state and development of the economy, and the transmission mechanism, it is likely to result in price inflation, which is usually just called "inflation", which is a rise in the general level of prices of goods and services.
This is commonly described as "too much money chasing too few goods". [1] More accurately, it should be described as involving "too much money spent chasing too few goods", since only money that is spent on goods and services can cause inflation. This would not be expected to happen, unless the economy is already at a full employment level.
In the first year of the Thatcher-led Tory government inflation rose to 15.3%, but then fell to 5% by the time of their election win in 1983. [11] However, the monetarist policies designed to curb inflation caused a recession in 1980 and resulted in a steep rise in unemployment from 5.4% (1,390,46 people) to 11.5% (3,104,66 people). [12]
This level of inflation amounts to 1.2% per year compounded, a relatively low inflation rate for modern-day standards, but rather high given the monetary policy in place in the 16th century. [ 1 ] Generally it is thought that this high inflation was caused by the large influx of gold and silver from the Spanish treasure fleet from the New World ...
Cost-push inflation can also result from a rise in expected inflation, which in turn the workers will demand higher wages, thus causing inflation. [2] One example of cost-push inflation is the oil crisis of the 1970s, which some economists see as a major cause of the inflation experienced in the Western world in that decade.