Summary
This quote suggests that the rate of inflation within an economy is largely influenced by the rate at which money supply is increasing. In other words, when the amount of money circulating in the economy is increasing rapidly, it is likely to lead to higher levels of inflation. This can be attributed to the concept of too many dollars chasing after a limited supply of goods and services, which drives up their prices. Hence, the quote emphasizes the crucial role of money supply growth as a determinant of inflation.
Topics
Inflation
By Roger Bootle
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