As you already saw in learning activity of unit 5, during the COVID-19 pandemic monetary aggregates such
Question:
As you already saw in learning activity of unit 5, during the COVID-19 pandemic monetary aggregates such as M2 have been rising so rapidly in Canada. The same situation is also happening in the US and as a result, many people wonder if they should be worried about future inflation or not. Read the article and discuss if the increase in monetary aggregates such as M2 necessarily mean that we will have high inflation in the future? Under what circumstances we will not face a high inflation rate?
Article Link:https://ca.finance.yahoo.com/news/worried-inflation-covid-don-t-110022385.html
Article Link: https://johnhcochrane.blogspot.com/2020/04/financial-pandemic.html
Video Link: https://www.youtube.com/watch?v=3-dvi1f_2vA
Please provide IN-TEXT Citations as well as credible references with the response.
Expert Answer:
The relationship between an increase in monetary aggregates M2 and future inflation is complex and not deterministic Factors such as the velocity of money economic output inflation expectations centra... View the full answer
