Reddit mentions of Principles of Macroeconomics

In the long run, inflation is essential a monetary phenomenon that can be explained by the Quantity Theory of Money:

MV=PY

Where

• M = Money Supply
  
• V = Velocity of money (the speed at which money changes hands)
  
• P = The aggregate price level
  
• Y = real GDP
  
  Holding V and Y relatively constant, this implies that an increase in the money supply will result in a proportional increase in the money supply. Source. (also Mankiw, 2014)
  
  How does this connect to a UBI? That depends on how a UBI would be funded. Realistically, it would almost certainly be funded by increased taxes, which would have little inflationary impact (just redistribution). But, if we were to fund a UBI entirely through seignorage (printing money), we can get an upper-bound on the inflationary impact.
  
  Lets assume a UBI of $10,000 for every US adult. US adult population is about 240M, so that would take $2.4T. Since the current M1 money stock is about $3.2T, the quantity equation suggests financing a UBI solely through seignorage would lead to at most 70% inflation - super high and a bad idea, but not enough to completely errode the effects of a UBI. Realistically though, it wouldn't be very inflationary at all since it would be funded primarily through taxation.
  
  __
  
  Notes:
  
  
• This is very much a back of the envelope calculation. I'm not worried about being very precise, just getting a worst-case upper bound.
  
• I've purposely ignored the money multiplier for simplicity. Since it is currently ~0.8 this should make things slightly smaller.
  
• I'm not a macro guy, so I may be completely missing something. Still, I'm pretty confident that if a UBI was funded via taxation there would be little inflationary impact.

Any introductory textbook will cover this stuff. The gold standard is Mankiw's Principles (micro & macro), though I've recently been using Mateer and Coppock (micro & macro).

Your library might have copies, and old editions of Mankiw can be found online for less than $10.

>The real interest rates tells us the real cost of the loan. It doesn't matter what the inflation or deflation is, as long as it is steady and known.

i serious don't understand what are you trying to say.

I provided you the math showing you that deflation adds up to the (real) cost of loans while inflation can be subtracted. The % risk markup that a lender wants covers his effort and the possibility that the borrower will default which is the same regardless of the inflation or deflation rate.

I'm not sure if you understood the concept of real and nominal and deflation and inflation itself.

>banning people from keeping money

I never said anything about banning. I just said that inflation gives an incentive for people to bring their money to banks where it can be reinvested in businesses.

>I just did. Inflation is no incentive to invest. It's an incentive to spend.

debatable. There is no math behind i know that can prove this since its more of a psychological thing.

> Investment is incentivized through the real interest rate. Inflation and deflation do not change the real interest rate.

see top...
i linked you a Wikipedia page (https://en.wikipedia.org/wiki/Real_interest_rate) saying:

>If, for example, an investor were able to lock in a 5% interest rate for the coming year and anticipated a 2% rise in prices, they would expect to earn a real interest rate of 3%.[1] The expected real interest rate is not a single number, as different investors have different expectations of future inflation. Since the inflation rate over the course of a loan is not known initially, volatility in inflation represents a risk to both the lender and the borrower.
In the case of contracts stated in terms of the nominal interest rate, the real interest rate is known only at the end of the period of the loan, based on the realized inflation rate; this is called the ex-post real interest rate. Since the introduction of inflation-indexed bonds, ex-ante real interest rates have become observable.[2]

there is clearly there is a link between the inflation rate and real interest rate

>But my main point is, I have still not seen sufficient theoretical groundwork,

you could start with the college lecture about this topic

Its 500+ pages thick and covers all the basics of our "current system" that is based on Keynesian