Every
month T&T's inflation numbers are reported, however the public is
never afforded the full picture with regard to its causes and its
implications. Descriptions of inflation almost always surface as a
nebulous scourge, an inconvenience that is inevitable and must be
tolerated. Yet inflation is a consequence of economic intervention by government which hinders the markets from attaining general price
stability.
Simply consider; that if productivity or output in T&T were to remain constant nominal prices would only increase if the money supply in T&T increased. The steady expansion of the money supply unfortunately has been occurring in T&T since the mid 90s triggering constant inflation. Increasing the supply of money simply decreases the value of existing dollars in circulation. By doubling the quantity of money you double the price level. by tripling the money supply and you triple price levels. Prosperity is only improved when productivity increases not when money supply increases.
Simply consider; that if productivity or output in T&T were to remain constant nominal prices would only increase if the money supply in T&T increased. The steady expansion of the money supply unfortunately has been occurring in T&T since the mid 90s triggering constant inflation. Increasing the supply of money simply decreases the value of existing dollars in circulation. By doubling the quantity of money you double the price level. by tripling the money supply and you triple price levels. Prosperity is only improved when productivity increases not when money supply increases.
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Source: T&T Central Bank |