Hi all, Our house prices are rising at about 14% a year. There are a number of reasons for this that I do understand: limited restrictions on foreign investment, low interest rates etc, but what I don't understand is why inflation is so low (0.1% according to the Reserve Bank). I assume the talking about the CPI inflation rates? Why doesn't the massive increase in house prices affect over all inflation? If banks are loaning more money (creating credit) doesn't this mean that there is more money in the economy, which would push up inflation? Thanks, I did not find the right solution from the internet References : http://www.debate.org/forums/economics/topic/85452/' video advertising campaign
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