Asking this question from an American perspective. At an average of 2% inflation, an equivalent new car that costs $40,000 today would cost $2,000,000 in 200 years. Assuming matching(ish) wage growth (i.e. a household of two married professionals could still afford a $2M car), what are the government’s options? Let things ride? Print new $1,000 or $10,000 bills? Reissue a *NEW* USD that is worth 0.01% of the old one?
Still on the fence about if humanity will be around long enough to have this problem, but just curious about the options for my great-great-great-great-great-grandkids.
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A little bit of inflation encourages economic growth. If you had a currency that didn’t inflate at all, then people could just hoard it and not use it. But because the value of that hoard will gradually shrink, it encourages people to invest it in things that will grow in value like businesses or property or what have you.
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