I understand that money needs to continually be printed as bills and coins are damaged or lost, but wouldn’t any currency be way more stable if it was just printed slower than it’s taken out of circulation?
I understand that money needs to continually be printed as bills and coins are damaged or lost, but wouldn’t any currency be way more stable if it was just printed slower than it’s taken out of circulation?
The value of a currency is not purely a function of supply. It changes based on the relative values of the things you can buy with it, including the relative values of alternate currencies. Human emotions play a large part, too. Simply coming up with a number for the inflation rate is a complicated and inexact exercise. Actively controlling inflation is even more difficult.
A little inflation is generally considered a good thing because it incentivizes people to spend their money rather than hoard it.