Today In Capital Matters: Inflation

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Edwin T. Burton of the University of Virginia argues that many are misunderstanding inflation:

Imagine you were driving your car and it ran out of gas. Would you call for a new set of tires or a new battery and expect that to get you back on your way?

If you don’t understand why your car is no longer running, you will likely be unable to get it going again. Bizarrely, American policy-makers seem to have no idea why inflation is raging out of control and look for fixes that have nothing to do with the causes of inflation.

So, let’s get back to basics. . . .



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