Divergence of Money Supply and Inflation Trends in Advanced Economies Since 1980

Since 2000, the relationship between money supply and inflation has weakened in advanced economies. From 1980 to 2000, an average annual money supply growth of 7.3% coincided with 4.1% inflation and 3.0% economic growth. However, between 2000 and 2023, despite an annual average money supply growth of 5.8%, inflation stood only at 2.1%, with accompanying economic growth at 1.7%. These contrasting figures indicate a notable divergence in the impact of money supply growth on inflation during this period.