<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>Recent increases in inflation rates around the world has lead to many discussions on the causes of such rapid adjustments, some suggesting that higher profits are responsible driving force behind inflation. Here we will focus on the United States case and demonstrate why quantity theory of money is relevant to explain what has been going on with inflation after 2020 rather than profit based theory of inflation. First section introduces the argument. Second section restates quantity theory of money with relevance to the empirical literature. Third section shows why quantity theory despite some suggestions works to explain the current levels of inflation. Fourth section notices why increases in nominal profits during inflation are part of the natural adjustment path. Last section offers concluding comments.</p>
</abstract>

Recent increases in inflation rates around the world has lead to many discussions on the causes of such rapid adjustments, some suggesting that higher profits are responsible driving force behind inflation. Here we will focus on the United States case and demonstrate why quantity theory of money is relevant to explain what has been going on with inflation after 2020 rather than profit based theory of inflation. First section introduces the argument. Second section restates quantity theory of money with relevance to the empirical literature. Third section shows why quantity theory despite some suggestions works to explain the current levels of inflation. Fourth section notices why increases in nominal profits during inflation are part of the natural adjustment path. Last section offers concluding comments.

Covid Monetary Expansion: Are Business Profits to be Blamed for the Inflation in 2022?

Studies in Logic, Grammar and Rhetoric

This work is licensed under the Creative Commons Attribution 4.0 International License.

Recent increases in inflation rates around the world has lead to many discussions on the causes of such rapid adjustments, some suggesting that higher profits...

Covid Monetary Expansion: Are Business Profits to be Blamed for the Inflation in 2022?

Publicado en línea: 30 dic 2022

Páginas: 441 - 450

DOI: https://doi.org/10.2478/slgr-2022-0022

Palabras clave
quantity theory of money, inflation, covid-19, profits

© 2022 Mateusz Machaj, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Covid Monetary Expansion: Are Business Profits to be Blamed for the Inflation in 2022?

Publicado en línea: 30 dic 2022

Páginas: 441 - 450

DOI: https://doi.org/10.2478/slgr-2022-0022

Palabras clavequantity theory of money, inflation, covid-19, profits

© 2022 Mateusz Machaj, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Palabras clave
quantity theory of money, inflation, covid-19, profits