Afford Anything

Inflation, Explained

Feb 18, 2022
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INSIGHT

Inflation Defined

  • Inflation occurs when money supply growth surpasses economic growth, decreasing purchasing power.
  • This involves factors like printing money, loaning, devaluation, money velocity, and confidence.
INSIGHT

Benefits of Inflation

  • Moderate inflation can be positive, encouraging investment and spending.
  • Different countries have varying inflation targets, like 2% for developed economies and potentially higher for developing ones.
INSIGHT

Cantillon Effect

  • The Cantillon Effect describes how new money's impact isn't uniform.
  • Those closest to the money injection benefit most, investing before widespread inflation.
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