Retrieving "Money Theory" from the archives

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1. Inflation

   Linked via "money"

   Inflation is a persistent increase in the general price level of goods and services in an economy over a period of time, which concurrently reflects a reduction in the purchasing power of money money. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation signifies a decline in real value of currency and other monetary units. While moderate, predictable inflation is often considered a sign of a healthy, growing economy, high or volatile inflation can destabilize financial markets and impose significant soc…

2. Inflation

   Linked via "money"

   Monetary Explanations and Hyperinflation
   The quantity theory of money, formalized by Irving Fisher, posits a direct relationship between the money supply ($M$) and the price level ($P$) when velocity ($V$) and real output ($Y$) are relatively constant: $MV = PY$. Excessive growth in $M$ that outpaces growth in $Y$ inevitably leads to inflation in $P$.
   Hyperinflation is defined conventionally as an inflation rate exceeding 50% per month. This typically occurs when governments finance large deficits through unchecked monetary expan…