Opinion: Fed's Bernanke adds to misunderstanding of inflation

02/20/2007 | Bloomberg

Ben S. Bernanke seems to be mistaking effect for cause, according to a columnist for Bloomberg News, by suggesting that inflation is the result of outside economic forces rather than monetary policy. "Oil prices don't cause inflation. Nor do wages, even though you'd never know it from discussions on the subject. The Fed causes inflation all by itself, creating too much money relative to the supply of goods and services," Caroline Baum writes.

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