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Originally Posted by bkkandrew There are two main causes of inflation, the most common being demand driven. Clearly there is little of that about right now... |
there are more than 2 actually, more like 4 main ones. The main source of inflation being Money Supply manipulation by the Fed. Demand pulled inflation only happens when the economy is doing great and at full potential. Hardly the case now. Cost push inflation, or supply shock are the most serious ones and difficult to "fix", this is the one we are having now. The "fix" is to create a long recession and kill AD. Very brutal.