Bad Explanations for Inflation

Source: American Institute for Economic Research
by Alexander William Salter

“While decomposing inflation into its constituent parts is empirically tricky, its essence is simple. Inflation results from too much money chasing too few goods. Milton Friedman popularized this rule of thumb. Its combination of intelligibility and explanatory power explains why it’s still widely used. But not everyone got the memo. Politicians, bureaucrats, journalists, and Very Online[TM] academics are looking hard for other causes. Let’s consider some bad explanations for inflation.” (06/23/22)