(You cannot underestimate my knowledge in this domain. Perfectly fine to link me "money is a store of value, and can be exchanged for goods and services"-level stuff, as long as it's not about Bitcoin)
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More money chasing a scarce resource causes inflation. Most of the extra money has flowed to a relatively small group that was already affluent hence marginal propensity to consume normal goods is low. Compare inflation of sports teams, penthouses, and prime waterfront property.
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I'm sure there are more complex forces playing into it, but I think this is basically the right answer. The money that might have gone into ordinary people's pockets, stimulating demand, pushing up prices, and driving inflation, is instead locked up in unicorns and supertalls.
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I view this as a failure of orthodox economics, but I know we do not share political priors. Here is a pretty solid article from the SF Fed with background. Central banks have (obviously) been trying to figure this out for a while.https://www.frbsf.org/economic-research/publications/economic-letter/2019/july/why-is-inflation-low-globally/ …
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I don't care if we politically disagree if you have an interesting answer.
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I can’t find it now, it I read that inflation doesn’t count things like improvements to medical insurance coverage and car functionality. So cars are not “more expensive”, you just have more features. Except you can’t but a car without airbags or electric windows.
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Assuming you are referring to Fed policy responses (money sloshing), the Fed was essentially buying your Pokemon cards (bonds) from you NOT printing new ones and giving them to you.
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What I have more in mind is the glut of oil money that has been in venture capital for the past decade
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Non-economist speculation; there has been inflation, but since that extra money has gone to the already wealthy, it’s not pushed up the prices of things whose prices determine the indices of inflation. Large houses in the smart areas of cities cost much more than they used to
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I've followed DeLong and Krugman and others on this question. I don't think they fully understand. Severe inequality probably plays a role. I think we also have a glut of underutilized talent -- the econ equivalent of a $50 bill lying on the sidewalk. (Impossible)
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