Predicting Inflation—A Holistic Approach

The quantity equation is a well-established, theoretic, long-run concept that has been criticized for variety of reasons, i.e., no precise statements about causality or dynamics between money growth and inflation can be inferred from its components. These shortcomings tackled by estimating based upon holistic approach the performance ceteris paribus analysis various levels velocity money, as well GDP. By testing validity equation, it possible to evaluate effects elevated budget deficits, unprecedented expansions monetary base caused global lockdowns, crash in productivity, on inflation. main findings this paper suggest level productivity driver only play subordinate role determination level. If holistically seen function general economic very explained comparing supply side with productivity.