The MMT Podcast with Patricia Pino & Christian Reilly cover image

#126 Dirk Ehnts: How Banks Create Money

The MMT Podcast with Patricia Pino & Christian Reilly

CHAPTER

Canadian Dollar and Us Dollar - Why Do Prices Not Adjust?

Inflation rate does not depend on the exchange rate, he says. Companies are absorbing some of this for an exchange risk - but it's costly to change prices and consumers don't like it. So you can use financial markets too to solve that problem: 'You can lock in exchange rates now' In a developed country such as Canada, inflation is almost the same even though the exchange rate goes up and down by plus or minus 50 per cent over decades.

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