Can businesses be an important cause of inflation

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Reference no: EM13769415

Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output

However, things are not that simple. The US had emitted lots of money and has very little inflation. In some cases there's also a spiral effect. Some heterodox economists talk about lack of supply of goods too. And emission still applies only to the mid & long term.

To sum up, the questions would be:

1) Can businesses be an important cause of inflation or is it a pure monetary effect?

2) In not-so-developed countries, there might not be much competition. Can that generate inflation?

Original question: Can anyone help me understand when that quote is true and when other factors should be considered too?

Reference no: EM13769415

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