When the economy is down, some economists say it’s time to “reflate” the economy. Tom Brady is not one of them...and not just because he’s not an economist, if you catch our drift.
Reflation is when the government increases the money supply, reduces taxes, or both, in order to stimulate the economy. Along with the Keynesian notion of today, reflation assumes that spending, spending, spending is the answer, and that people will spend more if they have more money. When recessions hit, everyone’s afraid, so they end up saving more than spending, which just makes the recession even worse. Ironic, isn’t it?
Reflation is a broad term, encompassing both actions of the central bank (monetary policy, like raising the money supply) and Congress (setting tax law). It’s called “reflation,” because it’s less about what specifically is happening and more on the effect it will have, i.e. inflation.
When there’s the same amount of value in a system, but more dollars, that decreases the value per dollar. With more dollars and the same amount of stuff, prices increase. Inflation-nation.
Still, reflation isn’t a dirty word (like Deflategate). It implies that the government is trying to recover price levels to the previous long-term trendline, and not far above in the short-term, like with normal inflation. In their eyes, it’s justified...a “catching up” to where we were before more than anything else.
But the real question is: what do Tom Brady’s eyes say?
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Finance: What is Disinflation?4 Views
finance a la shmoop what is disinflation disinflation often confused with dat
inflation refers to the decline in inflation rates over time in 1973
America was fully juiced with Warbucks from Vietnam inflation hovered around [soldiers firing weapons]
the mid going on high single digits and then higher from there like 7% or more
depending on where you look him and Jimmy Carter stepped in on this guy and [Carter walks into office]
raised the federal rates the Fed rates their massively stamping out the wild
bull economy and putting the brakes on inflation but it didn't happen until
after Carter was actually out of office and Reagan took over inflation [Reagan replaces Carter in office]
eventually had rocketed all the way up to about 14 ish percent on an annualized
basis looking at the monthlies in the 1980-81 period right here
well the crux of dis inflation is that inflation is still positive it's just
becoming well less positive and or like you know how you feel not long after you
say I do and the honeymoon is over and you have to take out the garbage so
under Carter the US inflation rates were attacked in a variety of ways the [Carter in a boxing ring]
biggest of which was to make the cost of renting capital very expensive which
cooled the economy but it took a long time like note how slowly inflation
rates came down and well really it was decades before things fully stabilized
you can see how things slowly disinflation the raging levels that
peaked at post-vietnam era 1314 percent then slid all the way down to a 1 to 3
percent way down there where it's hovered for a
while so that's disinflation still inflation but just less of it deflation [Disinflation deflating]
is when inflation turns negative like prices are actually declining and yes
we've had periods of deflation before albeit very short ones like in the post
mortgage crisis Mallove's in 2009 right here yes yes it's rare but it happens
got it okay class dismissed
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Price deflation is when pricing declines relative to past indices; monetary deflation is when the supply of money declines.
What is inflation, and if we poke it with a pin, will it pop?
Stagflation is a condition of the economy marked by slow (stagnant) economic growth and high unemployment and inflation