Well, yes, of course I simplified it a lot, it’s a very complex subject and I was just trying to illustrate why some inflation is needed even in a simplified version of the economy. This is such a complex topic that even your answer here is simplifying the subject, for example in the matter of pricing you also didn’t mention added costs, for example storage or transportation in the case of the rice, or price gauging or other stuff that breaks the free market such as monopolies or coalitions. But at the end of the day all of that added complexity doesn’t interfere with the point that I was making that even if you could keep prices stable some asshole would hoard money to drive the prices down.
As for the inflation thing, those two are exactly the same, i.e. try to prevent people from hoarding and incentive people to spend, so your first part is exactly the same thing I mentioned. As for the second point, sure, but productivity doesn’t increase equally across the board, something might have had a huge breakthrough and doubled productivity while other might have had a setback this year specifically and decreased it, even if productivity increased equally for every single product, and more money was printed to match you’re back in the same example of keeping price steady that causes people to hoard money to drive the price up.
Finally, yes, I purposefully left banks out of the equation because then all bets are off since they play very complex games with other people’s money.
Right. Sorry if my post sounded like criticizing. I didn’t intend to, just wanted to add to your answer.
And yeah, countless books have been written about this subject, no way we will be able to give a even remotely complete picture here. Countless books have been written about this subject.
Well, yes, of course I simplified it a lot, it’s a very complex subject and I was just trying to illustrate why some inflation is needed even in a simplified version of the economy. This is such a complex topic that even your answer here is simplifying the subject, for example in the matter of pricing you also didn’t mention added costs, for example storage or transportation in the case of the rice, or price gauging or other stuff that breaks the free market such as monopolies or coalitions. But at the end of the day all of that added complexity doesn’t interfere with the point that I was making that even if you could keep prices stable some asshole would hoard money to drive the prices down.
As for the inflation thing, those two are exactly the same, i.e. try to prevent people from hoarding and incentive people to spend, so your first part is exactly the same thing I mentioned. As for the second point, sure, but productivity doesn’t increase equally across the board, something might have had a huge breakthrough and doubled productivity while other might have had a setback this year specifically and decreased it, even if productivity increased equally for every single product, and more money was printed to match you’re back in the same example of keeping price steady that causes people to hoard money to drive the price up.
Finally, yes, I purposefully left banks out of the equation because then all bets are off since they play very complex games with other people’s money.
Right. Sorry if my post sounded like criticizing. I didn’t intend to, just wanted to add to your answer.
And yeah, countless books have been written about this subject, no way we will be able to give a even remotely complete picture here. Countless books have been written about this subject.