If “inflation is always and everywhere a monetary phenomenon,” why did the huge expansions of central bank money supply by the Federal Reserve, the ECB, and the Bank of Japan between 2007 and 2015 not result in high inflation in those economies? Causes of Inflation Albeit Money Supply

If “inflation is always and everywhere a monetary phenomenon,” why did the huge expansions of central bank money supply by the Federal Reserve, the ECB, and the Bank of Japan between 2007 and 2015 not result in high inflation in those economies?
Be sure to respond to at least one of your classmates’ posts:
Inflation did not rise due to the fact that although funds were provided by commercial banks, the money was not made available through loans. Banks kept the money in reserves, so there was no influx into the economy. An inefficient economy could also be the reason why inflation didn’t rise. Inflation would rise if the economy was strong. If it were weak, it would drive demand down and cause prices to increase.

 

The Inflation Causes and Money Supply

 

Answer

Inflation is affected by the currency stream. A state endorses specific monetarist or economic strategies in order to benefit its citizens when it evaluates the economic environment, price stability aims and public redundancy. (Coppola 2021). This can lead to an increase in inflation by changing the money supply. Inflation happens when the currency supply is greater than economic activities in normal situations. Inflation can be caused by stimuli other than currency streams. This could include the gradual increase in the cost of goods and services.

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