How Does the Government Cause Inflation?

Brian P. Simpson

Chapter 2 in Money, Banking, and the Business Cycle, 2014, pp 29-56 from Palgrave Macmillan

Abstract: Abstract In this chapter I show how the government creates inflation through so-called monetary policy. I also show the role “fiscal policy” has, if any, in causing inflation. The chapter also discusses how the government creates money ex nihilo and looks at some of the effects of inflation, particularly on profits and interest rates.

Keywords: Interest Rate; Gross Domestic Product; Monetary Policy; Fiscal Policy; Money Supply (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-33149-6_3

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DOI: 10.1057/9781137331496_3

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