Inflation is often framed as a simple function of money supply, but real dynamics are far more layered. Prices respond to a mix of demand pressure, supply constraints, cost shocks, and expectations. When production capacity is tight or supply chains are fragile, even moderate demand can trigger persistent price increases.

Monetary policy matters, but it operates through confidence, credit conditions, and the behavior of firms and households. Inflation becomes the outcome of interactions — not a single variable. Understanding it requires looking at the entire system, not just the central bank.