Note: This is post #108 in a weekly video series on basic economics.
Most people do not like when prices rise so most people do not like inflation. But there is one sector that sometimes finds inflation beneficial: government.
In this video by Marginal Revolution University, Alex Tabarrok explains why governments sometimes use inflation to their benefit—and how inflation can become like a drug.
(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.