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posted 3 years ago by MerlinsCry 3 years ago by MerlinsCry +378 / -2

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– kosher 5 points 3 years ago +5 / -0

The supply of money is not a driver for prices as much as money velocity is. mv=pq

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– Carry_Handle 2 points 3 years ago +2 / -0

It's both.

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– kosher 2 points 3 years ago +2 / -0

Correct - money velocity is the demand side of the equation. But it's the driver behind prices. If money velocity is down 10% that is a 10% deflationary effect, whereas a 10% increase in money velocity is a 10% inflationary effect.

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– WhiteTrashJesus 1 point 3 years ago +1 / -0

True but that the scenario still applies.

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