- 14 May 2023 06:55
#15274045
Without even mentioning MMT, this is an excellent video that explains an example of how and why mainstream economic theory gets everything wrong.
The channel "Money & Macro" explaines why the channel "Economics Explained" is just wrong when it predicted hyperinflation in the US some months or a year ago.
Among other things he explains the not so obvious assumptions hidden in the money supply theory of high inflation. For example, in the pandemic many people saved money because they could not spend it on services like they had been. This reduced the "velocity of money" which the theory usually assumes is constant. Also, much of the covid spending went directly into the bank accounts of corps which didn't have anything to spend it on, so they saved it. Which again, reducd the velocity of money.
.
The channel "Money & Macro" explaines why the channel "Economics Explained" is just wrong when it predicted hyperinflation in the US some months or a year ago.
Among other things he explains the not so obvious assumptions hidden in the money supply theory of high inflation. For example, in the pandemic many people saved money because they could not spend it on services like they had been. This reduced the "velocity of money" which the theory usually assumes is constant. Also, much of the covid spending went directly into the bank accounts of corps which didn't have anything to spend it on, so they saved it. Which again, reducd the velocity of money.
.