After world war two, congress decided to focus on creating policies that would, in theory, keep unemployment low. This became the basis of what's known as the dual mandate for the federal reserve. The fed is supposed to be attentive to both inflation and employment. They control the monetary supply by buying assets like commercial bonds. When the fed buys assets, it creates added demand, and that increas the money supply.
#365: Nearly every financial news story for the past several months has centered around inflation – but what, exactly, is inflation? What are its causes? What are its effects? How is it measured? What notable inflationary events have unfolded throughout history, and what can we learn from these?
In this episode, we peel back the layers of the onion in order to deepen our understanding of the concept of inflation. We discuss hyperinflation, biflation, stagflation; we discuss the CPI, the PPI, and core inflation. We discuss the demand-pull inflation, cost-push inflation and the wage-price spiral. We resist the temptation to make predictions about the future, choosing instead to focus on refining our understanding of the present.
Enjoy!
For more information, visit the show notes at https://affordanything.com/episode365
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