Can a government reduce inflation by selling public property – i.e. trading assets for private cash and reducing the money in circulation?

Question

Can a government reduce inflation by selling public property – i.e. trading assets for private cash and reducing the money in circulation?

In: 18

Answer 1

They can do this to raise money, but largely, the better way to remove money from circulation is taxes – if you sell government property, the government will just have to rent most of it back. So long-term it’s not a great move.

Alternatively, the government could borrow more money than it needs in order to suck cash out.