Real GDP 7 Nominal GDP 14 go to eda,gov and look up data (what causes the inflation to accelerate slide 27) Nominal GDP M money supply x V velocity P price level x Y real gdp Growth of money supply vs growth of productivity We want money for goods and services Money supply growth gives us purchasing power Aggregate demand (purchasing power) Aggregate supply (availability of G S) goods and services Growth in Actual gdp vs Growth in Potential (substantial) gdp Compensation vs Productivity There is a disparity between purchasing power and ability of goods and services Using soft data means taking surveys by going out and asking What do you expect inflation to be in the next year You take the average of a group of people Gasoline is not getting cheaper Build into what you think tomorrow is gonna be We tend to anchor what tomorrow is gonna be By simply asking people you get an answer Better to judge anything not by what people say but what they do There are financial instruments available that tell what investors think of inflation There can be securities that offer protection against inflation TIPS (TREASURY, INFLATION, PROTECTIVE SECURITY) if the price of one security changes then you can expect the inflation percent to go up This is how you can see how the market is thinking $1000 Look up what an inflation hedge is When people expect more inflation they tend to buy more physical assets like real estate or art Inflation expectation can be watched through asset buying

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Real GDP 7% Nominal GDP 14% go to eda,gov and look up data. (what causes the inflation to accelerate? slide 27) Nominal GDP= M:money supply

Real GDP 7% Nominal GDP 14% go to eda,gov and look up data. (what causes the inflation to accelerate? slide 27)
Nominal GDP= M:money supply x V:velocity= P:price level x Y:real gdp
Growth of money supply vs growth of productivity. We want money for goods and services. Money supply growth gives us purchasing power.
Aggregate demand (purchasing power)
Aggregate supply (availability of G+S) goods and services.
Growth in Actual gdp vs Growth in Potential (substantial) gdp
Compensation vs Productivity
There is a disparity between purchasing power and ability of goods and services.
Using soft data means taking surveys by going out and asking. What do you expect inflation to be in the next year? You take the average of a group of people.
Gasoline is not getting cheaper. Build into what you think tomorrow is gonna be. We tend to anchor what tomorrow is gonna be. By simply asking people you get an answer. Better to judge anything not by what people say but what they do. There are financial instruments available that tell what investors think of inflation. There can be securities that offer protection against inflation.
TIPS (TREASURY, INFLATION, PROTECTIVE SECURITY) if the price of one security changes then you can expect the inflation percent to go up. This is how you can see how the market is thinking. $1000.
Look up what an inflation hedge is
When people expect more inflation they tend to buy more physical assets like real estate or art. Inflation expectation can be watched through asset buying.