For example, if our “reproduction rate is 1%” meaning our population doubles every 72 years ish, wouldn’t that essentially mean that inflation would be 1% less likely to occur each year because now there are more people that utilize this money supply both by taking and giving to the economy? And could this essentially be taken off of a discount rate that we might use when analyzing any future investments?
In: Economics
You assumption would be correct if we based our money on something that had a limited supply, for example gold. Then as more people existed there would be less currency per person and deflation would occur.
However our current system allows the government (and the banking systems it uses) to increase the total currency for use when the demand is there. So we avoid this problem.
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