>collected them and did not spend them, thus driving up the value of the
>money remaining in circulation. It can be inflationary but usually not on
>a catastrophic scale.
Sorry to be picky, but driving up the value of money is *deflationary,*
Simply put, inflation is money chasing goods and assets.
Deflation, on the other hand, is assets and goods chasing money. That's
pretty much what we've got now.
In spite of double-digit increases in money supply (normally quite
inflationary) in the world's two largest economies (USA and China) and
nearly that in the third largest economy (Japan), the aggregate
"inflation" rate in the world's 9 largest economies (USA, China, Japan,
Germany, India, France, UK, Italy, and Brazil --- which together
account for 70% of world GDP) is a virtually non-existent 0.4%,
weighted according to the size of the economy.
Money supply for the last 65 years or so has been managed by adjusting
interest rates. All currency in circulation accounts for under 10% of
the total money supply, so messing with currency (especially coins) has
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