Prices merely rise to reflect the increase in the supply of money relative to the supply of consumer goods.
According to the textbooks, an increase in the supply of yen relative to the supply of dollars should reduce the price of the yen.
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Slowing the economy reduces the supply of goods and services relative to the supply of money, which itself can be inflationary.
Rather, the relative scarcity of supply has allowed January's flood of deals to be absorbed, halting a slide in bond prices.
China's water supply relative to its 1.3 billion-person population is roughly a fourth the world's average, and the shortage is worse in the north.
Experienced managers are in short supply relative to the huge demand.
In his book, Mr Sen raised the theoretical possibility that a pastoralist's supply curve might actually bend back on itself: as the relative price of livestock falls, a hungry pastoralist might supply more animals to the market, not fewer as elementary economic principles would imply.
As a consequence, overall supply in 1973 actually increased relative to consumption.
An excess supply of money can also distort relative prices and misdirect investment.
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But for supply to create its own demand, markets must be free to determine relative prices, including interest rates.
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So far, the Bank of Japan has pumped up the base money supply (along with expectations) and the yen has fallen 20 percent relative to the dollar since September.
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Often, an unequal flow of currency reduces the supply of money in the nation and can lead to an increase in the exchange rate relative to the dollar, leading to inflation and, in a worst case, labor market pressures leading to unemployment.
First, the premium for skilled workers has been falling: a surge in secondary education has increased the supply of literate, reasonably well-schooled workers, and years of steady growth have raised relative demand for the less skilled in the formal workforce, whether as construction workers or cleaners.
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