Basically, the idea is to print not too much and not too litle money, and pass between Scilla and Haribda of inflation and deflation. Also, the idea is to adjsut monetary policy of a central bank to act opposite to the business cycle, that is, to print more money during deflational recession and less during boom phase of economy. I have read about the idea in Dr.Roubini Econoblog during 2008 recession, and, in fact, it was presented as ideal policy, a dream, which ability to work is not known, but the dream is attractive to central banks.
If we look closer, we will find that we live in the period of unprecidented money printing, started after 2008. US government increased M1 (cash) money supply several times after 2008 - from around 1 trillion to 3.5 trillion in circulating bills. But it didn’t produce “good” inflation, as these money pured into speculative assets. (This is where economists start to disagree, and my point become more speculative.)
It also good to note that while official inflation is very low, the price of a lot of important things increased several times, including gold, education, housing (for a longer period given previous bubble), stock prices, medicine, phones and even TV sets (but it is not presented in official infltion data because of “hedonistic indexing”).
That is not how it works.
How does it work instead? I don’t know much about this and your response doesn’t seem to explain why you think that or what you think happens instead.
Basically, the idea is to print not too much and not too litle money, and pass between Scilla and Haribda of inflation and deflation. Also, the idea is to adjsut monetary policy of a central bank to act opposite to the business cycle, that is, to print more money during deflational recession and less during boom phase of economy. I have read about the idea in Dr.Roubini Econoblog during 2008 recession, and, in fact, it was presented as ideal policy, a dream, which ability to work is not known, but the dream is attractive to central banks.
If we look closer, we will find that we live in the period of unprecidented money printing, started after 2008. US government increased M1 (cash) money supply several times after 2008 - from around 1 trillion to 3.5 trillion in circulating bills. But it didn’t produce “good” inflation, as these money pured into speculative assets. (This is where economists start to disagree, and my point become more speculative.)
It also good to note that while official inflation is very low, the price of a lot of important things increased several times, including gold, education, housing (for a longer period given previous bubble), stock prices, medicine, phones and even TV sets (but it is not presented in official infltion data because of “hedonistic indexing”).
https://en.wikipedia.org/wiki/Goldilocks_economy