0 sats \ 3 replies \ @premitive1 29 Feb \ on: Red Sea Tensions: Eurozone Inflation on the Radar econ
Supply and Demand of the underlying good are not related to inflation. changes in the money supply are related to inflation.
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0 sats \ 2 replies \ @TomK OP 29 Feb
In the short term, supply-side destructions can very well have an inflationary effect. After that, the economy can adjust if it has a free market.
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21 sats \ 1 reply \ @premitive1 29 Feb
It seems to me you're conflating supply curve shift to the left with price inflation, which is a phenomena of increased money supply.
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229 sats \ 0 replies \ @TomK OP 29 Feb
I know. You're right. It's a supply shock (S to the left) in the isolated sector. Inflation refers to MS. Correct
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