Exact(3)
"While we believe the snowstorm contributed to the high February reading, we believe that rapid money supply growth has been the main driver of high and rising inflation," said Yu Song and Hong Liang, two Goldman Sachs economists, in a research note.
They reaffirmed that rapid money growth is the root cause of the upturn in inflation.
Rapid money growth produced a 13-percent rise in prices with interest rates rising to 15.51 percent on three-month Treasury bills by 1981.
Similar(53)
If so, one source of hot air is easy to spot: rapid money-supply growth, following the Federal Reserve's loosening of monetary policy over the past year.
Imported food inflation is part of the problem, but so is rapid money-supply growth and the cash pouring into state corporations.
It is now widely accepted that rapid money-growth is a useful early warning of credit and asset-price bubbles, even if it is not a reliable predictor of rising inflation.The communication fumbles under the ECB's first president, Wim Duisenberg, hurt the euro's standing and value on foreign-exchange markets.
"It seems inevitable that a government turns to its central bank to bridge budget shortfalls, with the result being too-rapid money creation and eventually, not immediately, high inflation," he said at a policy forum here, sponsored by the Peterson-Pew Commission on Budget Reform. Peterson-Pew Commission on Budget Reform
But some economists still think that rapid broad-money growth is a good leading indicator of higher inflation.
At the height of the first Internet boom, Mr. Chasen recalls, he and his co-founder, Matthew Serbin Pittinsky, Blackboard's chairman, were under pressure to stop charging for their software — a formula for rapid (if money-losing) growth.
As Mr King said on May 10th, "in the long run, if you have rapid broad-money growth, you are going to get inflation".For some time, inflation has tended to be lower and growth higher than the Bank has expected.
Mr. Immelt candidly admits that G.E. was seduced by GE Capital's financial promise — the lure of rapid-fire money-making unencumbered by the long-range planning, costs and headaches that go into producing heavy-duty material goods.
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