Traditional Culture Encyclopedia - Weather inquiry - Where is the source of rising prices? Everyone said what I went up for.
Where is the source of rising prices? Everyone said what I went up for.
But there are many reasons to increase the money supply.
For example:
1. Economic growth. The existing amount of money can't meet the needs of economic development, and the wage level has increased. At this time, the money supply has increased and prices have gone up (the landlord can think about whether your salary has also gone up in recent years). This is also the normal reason for rising prices.
2. stimulate the economy. For example, when the economy went down, like in the 2008 world financial crisis (if I remember correctly), China implemented a 4 trillion investment plan to boost the economy. Think about it, at that time, our GDP was less than 30 trillion. This 4 trillion stimulus to the economy is basically injected into the market out of thin air. More money, higher prices and higher inflation (by the way, this 4 trillion stimulus plan is right), so we are still paying for that 4 trillion.
The landlord's statement that "I will only go up if it goes up" is inaccurate. Because as long as the general price level rises, it is directly related to the money supply. Once money is put into the market, it will have a chain reaction, which will eventually be reflected in commodity prices. Therefore, if too much money is issued, the price level will increase.
However, this does not mean that economic growth must be at the expense of inflation. For example, the United States has maintained economic growth after years of deflation, which is mainly related to economic policies. However, in today's China environment, it is basically impossible to raise wages substantially, not prices. The best result can only be that your salary outperforms the price.
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