definitions are strange things....
Posted on: March 10, 2025 at 17:54:13 CT
Spanky KU
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Inflation is caused by numerous factors. But at it's most basic level, inflation is driven by too much demand relative to supply.
The demand can remain unchanged while the supply side of the curve drops. That is not a 'money supply' issue. It is a supply problem. Think Cost-Push inflation where a war or disaster disrupts supply.
If we are discussing an increase in demand that exceeds available supply (demand-pull), we are more than likely seeing an increase in money supply that is (as in your definition) "in excess of an increase in the goods and services in the economy"