I’ve read that many banks want a certain level of inflation and I don’t really see why. Why is important to banks that a stable product costs more tomorrow than today?
Is it to make people spend their money more since storing it will eventually make is worth less?
In: Economics
A small amount of inflation compels people to use their money, either spending it or investing it. This means money is either being injected into the economy through spending, or is available for businesses and people to borrow, which also generates economic activity.
Latest Answers