> injecting money into the economy, which always results in inflation
This can be disproven by simply plotting the quantity of money in circulation compared to the inflation rate.
For instance from 2005 to 2020 the US went from 6.5 to 15 trillion dollars in circulation yet inflation was around 2%.
Same story for the eurozone which went from 3 to 9 trillions euro in circulation, with similar inflation (despite the Quantitative Easing policy of injecting currency in financial markets).
The eurozone provides another clue in that its member states experience different inflation in spite of sharing a common currency.
The true effects of injecting money in the economy are more complex than a straightforward increase in inflation. Most notably, since economic projects must be financed before they can be undertaken, injecting money in the economy can result in the economy increasing in size if there is spare productive capacity and resources.
There are indeed cases like Venezuela where injecting money results in inflation because there is a supply crisis (more money attempts to buy the same quantity of goods) but it cannot be generalized to all economies.
This can be disproven by simply plotting the quantity of money in circulation compared to the inflation rate.
For instance from 2005 to 2020 the US went from 6.5 to 15 trillion dollars in circulation yet inflation was around 2%.
Same story for the eurozone which went from 3 to 9 trillions euro in circulation, with similar inflation (despite the Quantitative Easing policy of injecting currency in financial markets).
The eurozone provides another clue in that its member states experience different inflation in spite of sharing a common currency.
The true effects of injecting money in the economy are more complex than a straightforward increase in inflation. Most notably, since economic projects must be financed before they can be undertaken, injecting money in the economy can result in the economy increasing in size if there is spare productive capacity and resources.
There are indeed cases like Venezuela where injecting money results in inflation because there is a supply crisis (more money attempts to buy the same quantity of goods) but it cannot be generalized to all economies.