00:00What is inflation? Before Janet Yellen, there was this guy, Larry Summers, the former Treasury
00:05Secretary who was in charge of financial matters in the U.S., and here's what he said.
00:08Well, ultimately, inflation actually isn't that complicated. When you have rising demand and only
00:14so much supply, prices keep going up. You put too much water in the bathtub, the bathtub overflows.
00:20And that makes perfect sense. If you fill a tub with too much water, eventually it overflows.
00:24And that makes for a beautiful analogy, but also leaves out a lot of nuance,
00:28like the fact that there's actually two tubs. There's consumers and there's businesses.
00:33When inflation goes up, both sides have to pay more, but not equally.
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