109. What’s the main driver of inflation?
There’s the theory that the supply of money is a major contributor to the rate of inflation. Prof Steve Keen says the central banks have spent the last ten years unsuccessfully trying to demonstrate as much. The need for money to be issued to cover government debt has often been levelled as a cause of inflation and a reason for the austerity measures that have been so prevalent in the last decade. Nobody wants to end up like Zimbabwe, right? In this podcast Phil Dobbie asks Prof Steve Keen what’s the real cause of inflation, if it’s got little to do with the supply of money. Is it the cost-push argument? If so, why is inflation reluctant to rise back up to pre-financial crisis levels?
It is Free