Acton Institute Powerblog

Understanding the causes of inflation

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Note: This is post #107 in a weekly video series on basic economics.

In the last post in this series we learned that according to the quantity theory of money, if the amount of money in an economy doubles the price levels also double, causing inflation. The consumer, therefore, pays twice as much for the same amount of the good or service. Can we put this theory to the test?

In this video, Alex Tabarrok of Marginal Revolution University looks at some real-world examples and see if the quantity theory of money holds up.

(If you find the pace of the videos too slow, I’d recommend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)

Click here to see other videos in the Introduction to Economics series.

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Joe Carter Joe Carter is a Senior Editor at the Acton Institute. Joe also serves as an editor at the The Gospel Coalition, a communications specialist for the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and as an adjunct professor of journalism at Patrick Henry College. He is the editor of the NIV Lifehacks Bible and co-author of How to Argue like Jesus: Learning Persuasion from History's Greatest Communicator (Crossway).

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