Why not make tariffs cause inflation?

[Sir Tornado]

so what you are saying, for someone young and not smart about this advanced stuff, is that if a country has bad inflation, everyone around it will suffer from this too?

If someone dumped a whole lot of gold into one country, everyone in the country will have gold. The prices will rise in that country. Suddenly, the people of the country find prices are high in their country, but low in the neighbouring country. Obviously, they will go to the neighbouring country and buy stuff there, flooding that country with gold as well...

This assumes, that there is free trade between the two countries.

Also, the key is, that the people of the first country should get the gold. Merely the government having gold is not enough... may be inflation should be linked to Government spending vis-a-vis the size of the economy (tax received minus gold production) from the country. This way, we can track injection of excess gold into the economy.

 

[Enewald]

so what you are saying, for someone young and not smart about this advanced stuff, is that if a country has bad inflation, everyone around it will suffer from this too?

When most of the world was using gold/silver currencies, yes. They were a global currency, with the supply kept in check by how much the mines were able to produce.

When the American shinies flooded into the world market, it resulted in global inflation. Sure, Spain got hit first. Then China, France, England, Netherlands, Austria, Russia, India; everyone who had used shiny metals as a currency now realized that when before there were lets say 10m shiny coins circulating, now there were say 20m shiny coins in circulation. The supply of shiny stuff had increased, resulting in inflation. It did not hit everyone at the same time, with same intensity, rather the new supply slowly flowed from the American mines over the centuries, resulting in inflation for everyone using a metal currency.

In modern world we are not using global metal currencies, but rather national fiat moneys. When Zimbabwe prints more dollars, it does not result in inflation elsewhere, as other countries are not using Zimbabwean dollars as their medium of exchange.