As Milton Friedman said, “Inflation is always and everywhere a monetary phenomenon.” Bernanke in his textbook says “The existence of a close link between the price level and the money supply in an economy is one of the oldest and most reliable conclusions about macroeconomic behavior.”
This note discusses the causes of inflation and hyper-inflation, and the current reasons to worry or not worry about inflation.
Available as a 14-page .pdf, here on the Close Mountain site.
About Thomas Coleman
Thomas S. Coleman is Senior Advisor at the Becker Friedman Institute for Research in Economics and Adjunct Professor of Finance at the Booth School of Business at the University of Chicago. Prior to returning to academia, Mr. Coleman worked in the finance industry for more than twenty years with considerable experience in trading, risk management, and quantitative modeling. Mr. Coleman earned a PhD in economics from the University of Chicago and a BA in physics from Harvard College.
