Originally posted by seanD
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The prices of goods can increase via:
1. Companies simply putting their prices up to make more profit (which we can measure and find was a major cause of observed inflation of prices)
2. Supply chain shortages leading to supply/demand pushing up prices (which we can measure and find was a major cause of observed inflation of prices)
3. Worker wage increases leading to increases in the price of goods (which we can measure and find was a minor cause of observed inflation of prices)
4. An increased money supply via Fed intervention or government spending policies, e.g. covid relief checks (which we can measure and find was a minor cause of observed inflation of prices).
There have been heaps of studies by economists now on inflation over the last year and they've been able to quantify the effects quite clearly. The two primary causes were supply chain issues, and companies simply putting up prices to make bigger profits and using inflation as an excuse for putting up prices. Any Fed intervention now to raise interest rates attacks #3 & #4 which we can quantify as much smaller causes of the inflation, so the Fed is not actually addressing the primary causes of inflation.
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