Inflation explanations

Definitions

 * Inflation is the  continuous rise in the price level.  [as opposed to particular events such as due to an oil shock, or a temporary forex change].   MMT and inflation – Part 1 2010.7.7


 * Firms are quantity adjusters if they have spare capacity.
 * When they do not have spare capacity, Firms become price adjusters (prices go up)

Overview of positions

 * Monetarist account: "for most monetarists any anti-inflationary policy will stem from the basic concept that there should be a gradual reduction in the money supply. "  (Investopedia1)
 * Keynsian- "John Maynard Keynes challenged the theory in the 1930s, saying that increases in money supply lead to a decrease in the velocity of circulation and that real income, the flow of money to the factors of production, increased. " (Investopedia1)
 * MMT- Excluding supply shock scenarios, inflation occurs when there is chronic excess demand relative to the real capacity of the economy to produce. MMT and inflation – Part 1 2010.7.7

Implications for Climate Change activism:

 * With a rapid shift over from fossil fuels, there would likely be substantial supply side shocks in the interim.