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There are two logical explanations why printing money may not lead to inflation in the prices of goods and services (which is what official inflation tends to measure). The first is that the printed money is not going into the consumption of goods and services, but to the purchase of assets (including intangibles) and the servicing of debt (the receivers of ...


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Will printing more money during COVID cause hyperinflation? Likely not for several reasons. First, the article from economicshelp.org you mention is oversimplifying the economics, which is understandable as it is article written for non-economists, but to understand this issue we need to go little bit further. Inflation, is simply just positive change in ...


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There has been talk of these sorts of policies being inflationary. It looks like the problem will more likely be too little inflation, rather than too much. The larger cost, however, is to do nothing. These handouts have helped bolster consumer spending and helped consumers meet their debt repayments. Without these handouts, you would likely see far more ...


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What is the resolution down to which the annual inflation value can be controlled? They can target arbitrary number. For example, they can target $1.9999\%$ or $3.1415\%$. Could it be set, for the sake of the example, to 1.9% instead? Or to 1.95%? Yes, it could. However, the target inflation rate is more or less aspirational and it is the value Fed aims ...


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According to advocates of MMT, the primary risk once the economy reaches full employment is inflation, which can be addressed by gathering taxes to reduce the spending capacity of the private sector. This statement is in accord with MMT, and it can be traced back to the concept of Functional Finance. One could do a search for Abba Lerner’s articles on ...


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Does Modern Monetary Theory (MMT) provide a useful insight into how to manage the economy? That depends on your definition of MMT, because it is not generally agreed on what it even is. You will find some arguing it is just a macro/monetary theory (such as the Wikipedia page) but then I seen MMT proponents on this site arguing it is a whole new paradigm ...


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There is an economic literature on optimal currency areas. However, that is related to the adoption of a single currency. As described in the question, a basket is just a new asset that is a weighted allocation to underlying currencies. Once the weightings are fixed, the fair value of the basket is the weighted value of the component currencies, which can be ...


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