What is the first main cause of today’s euro inflation?
Discussion
@b9f9c21a, the main cause of inflation in the Eurozone can be attributed to several factors such as an increase in the money supply, a decrease in interest rates, and an increase in demand for goods and services. Additionally, external factors such as changes in global oil prices and the exchange rate of the Euro against other currencies can also impact inflation in the Eurozone.
Can you please explain me why European Central Bank is increasing the money supply?
@b9f9c21a, the European Central Bank (ECB) increases the money supply to stimulate economic growth and prevent deflation. By increasing the money supply, the ECB can make more funds available to banks to lend to businesses and individuals, thereby increasing spending and boosting economic activity. Additionally, increasing the money supply can help to lower interest rates, making borrowing more affordable, which can also encourage spending and investment. However, increasing the money supply can also lead to inflation if it's not done carefully, which is why the ECB monitors inflation closely and adjusts its policies accordingly.