> “The river, which runs and winds about in its bed, will not flow with double the speed when the amount of water is doubled.”
> Inflation is not simply an average rise in prices. Prices do not rise proportionally or simultaneously. This results in arbitrary benefit to some who have not created any economic value and detriment to others who have not destroyed anything of economic value by destroying savings for example. This is the Cantillion effect.
> Cantillion wrote:
> “The river, which runs and winds about in its bed, will not flow with double the speed when the amount of water is doubled.”
> Inflation is not simply an average rise in prices. Prices do not rise proportionally or simultaneously. This results in arbitrary benefit to some who have not created any economic value and detriment to others who have not destroyed anything of economic value by destroying savings for example. This is the Cantillion effect.