This is the Cato Daily Podcast for Thursday, July 14th, 2022.

I'm Keila Brown.

It's been a long time since most Americans have seen inflation like this in the wild,

and for younger people, they haven't seen inflation like this in the wild and for younger people they haven't

seen inflation like this ever. So there are a few things worth keeping in mind

when trying to assign blame and give grace to the people and decisions that have

given us this consistently high inflation.

Cato's Norver Michelle comments.

There is a famous phrase from Milton Friedman, the economist, that inflation is everywhere and always a monetary phenomenon.

However, as you noted recently in a discussion that there's more to it than that.

That's right.

There's actually even if you took this as gospel, which you

shouldn't necessarily do, there's more to it than that. That's right, that's right.

The whole quote goes on to say inflation is always in everywhere a monetary phenomenon in the

sense that so he's very careful to describe exactly what he means and he says in the sense that it is caused by the rate of

growth and money relative to now I'm paraphrasing. It's caused by the rate of growth in the money supply relative to the

rate at which we can produce things relative to output. So there's a dynamic relationship going on there.

And what's happened is everybody's just taking that to mean,

well, if there's inflation, it's the Fed's fault.

And the Fed printed too much money, we get inflation.

And it's much more complicated than that.

So help us understand this.

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