Great explanation what inflation is about @vieira
he first, that inflation is the generalized increase in prices; the second, that inflation is only the increase of monetary issue.
This is indeed very common belief.
Second, the rise in prices, generalized or not, homogeneous or not, is only the manifestation of another event that precedes it, and which we can access through abstraction.
Wouldnt you agree that rises in prices are also caused by property market? After all if rentals are more expensive, then costs are growing and it may push prices forward as well. And it wont have anything to do with inflation.
Yours
Piotr
I think the opposite could happen, because if people are spending more money on rent, then they have less money to spend on other products.
The increase in rent could have an effect similar to that of taxes, with which most of the time it is sought to reduce inflation.
Again, thank you very much for stopping by, greetings!
hi @vieira
I think we didnt understand each other. What I ment is that since rental prices goes up, then manufacutring and many other services will be more expensive. So final price of goods and services is increasing.
Yours
Piotr
Really it is difficult that the increase of the rents causes by itself that result, unless in that hypothetical situation you describe the whole raw materials industry must pay a higher price for the rental of their property, which except for a situation in which the government raise taxes, it is very difficult to occur in a widespread. In that case, what is known as "cost-push inflation" would be generated.
Dear @vieira
Thank you for your comment.
So just to summarize: Let's say that you want to buy milk from your shop.
Not only it has to be manufactured (price of land / rental of property etc will already increase overall cost of manufacturing).
Then you have network of shops selling that milk. And rentals are also part of the cost.
You've shipping companies. They also rent offices etc.
At the end cost of rent is affecting everyone on the way.
If cost of land/properties/rent would increase heavily then it would push prices up of everything. Which cause inflation and it is still not related to printed money.
Am I right or is my thinking process wrong?
Yours
Piotr
In that hypothetical case, it could be said that yes, but then, as I said, we would have to ask ourselves, did all the rents go up in price? What happens to the owners of their own land who don't have to pay rent? Why does the price of rents rise?