Chapter
Inflation Explained: Money Supply versus Relative Prices
26:58 - 31:57 (04:59)
The increase in money supply causes inflation, not the increase in the price of oil. Bank of Japan kept a steady money supply growth during the oil embargo in 1973, which prevented significant inflation rates despite the increase in the oil prices.
Clips
The economy is impacted by a combination of factors such as war, supply chain issues, and oil production restrictions.
26:58 - 28:34 (01:35)
Summary
The economy is impacted by a combination of factors such as war, supply chain issues, and oil production restrictions. While interest rates and money supply can have an effect, these are blunt tools for a complex problem.
ChapterInflation Explained: Money Supply versus Relative Prices
EpisodeWhy Does Fighting Inflation Have to Hurt So Much?
PodcastThe Problem With Jon Stewart
The increase in the money supply is what causes inflation, not the prices of certain commodities like oil or wheat going up compared to everything else.
28:34 - 31:57 (03:23)
Summary
The increase in the money supply is what causes inflation, not the prices of certain commodities like oil or wheat going up compared to everything else. Even if the price of a specific item goes up, but the money supply stays stable, then the individual will just buy less of that specific item, not everything else, causing the overall price level to remain stable as well.