What causes inflation?

The basic cause is when the government prints too much money...more money in the market = higher prices

I must hear the word "inflation" a million times a day at school.

Manu is right though, it is caused by the gov't getting printing happy.

Does inflation cause the recession?

You guys think it has anything to do with the need for capital (new business .... before a company goes public)?

Originally posted by Princess

Does inflation cause the recession?

IMO it ultimatly causes just the opposite. .... it can be used to indicate future growth in the market .... I think.

Well, inflation usually occurs during a recession, and like notch said it comes nearer to the middle/end than to the begining. The inflation stage is the government trying to pump capital into the market, in a hope that with more money available in the form of lines of credit and paper money for spending that people will go out, buy, build, etc. The unfortunate result is a slight to great devaluing of the dollar, so that you spend more on a like good.

This, if done in excess, can further the recession, but if used effectively, can as notch said, help get us out of one.

You guys think it has anything to do with the need for capital (new business .... before a company goes public)?

It definately related to new capital in the sense that is one of the main ways the government gets the cash into the market, extended lines of credit, etc, but I am not sure what ya mean with regards to companies going public?

Originally posted by Manu
Well, inflation usually occurs during a recession, and like notch said it comes nearer to the middle/end than to the begining. The inflation stage is the government trying to pump capital into the market, in a hope that with more money available in the form of lines of credit and paper money for spending that people will go out, buy, build, etc. The unfortunate result is a slight to great devaluing of the dollar, so that you spend more on a like good.

This, if done in excess, can further the recession, but if used effectively, can as notch said, help get us out of one.



It definately related to new capital in the sense that is one of the main ways the government gets the cash into the market, extended lines of credit, etc, but I am not sure what ya mean with regards to companies going public?

It does not necessarily have to go public ... but once a company is public the shareholders start to support/benefit from the company (not always the case prior to public, in reference to shareholders investing (or not) in an unproven company i.e. requires government money instead).


Have you paid any attention to what seems to be a new trend (according to Harvard Business School) ... more and more Non-Profits instead of big money makers? What do you guys think this is an indication of ... what effects could it have on future inflation, and even more importantly the markets?