Inflation 26.08.2023

Mark McIlroy



My equation for inflation is:



	       dV
	dP = ------
	       dG


in these terms:


		    change in the volume of money
change in prices = -------------------------------
		    change in the volume of goods



1. Banks do not create money. Banks are simply private-sector businesses.


2. Money is created by the issuer of the currency (the Federal Reserve, Reserve Bank of Australia) to fund Federal Government budget deficits.


3. The solution to inflation is to run balanced Federal Government budgets.