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It's not the money supply. It's the money flow, which you can model as a product of money supply and money circulation speed. A $1000USD minimum wage will increase circulation speed and from there induce inflation.


Let me get this straight.

You think a minimum wage increase will increase the velocity of money, which will cause inflation, which is a good thing.

That's the argument? Is that argument . . . original?


No, it's not original. It's called the "multiplier effect" and it's a pretty standard economic principle. See Forbes:

http://www.forbes.com/sites/timworstall/2013/02/25/overestim...


Don't read too much into my comment. Your argumentation was based on the the fact that inflation only occurs when you add monetary mass. I just pointed that that's a naive view. Contrary to your statement, you can legislate inflation into existence by creating conditions for increased money flow.

I did not say anything about the benefits of increasing minimum wage. In general it is known that the absence of minimum wage creates unsustainable imbalances of income society-wide. However, I don't know the US economy well enough for an informed opinion. Your current imbalance of income is huge, but that's only one data point.




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