UBI may cause a transitive increase in price level, concentrated around middle-income housing or consumption goods.

“It is most likely that housing and consumption goods will constitute the majority of the price level spike. Specifically, it would be middle-income housing or consumption goods, as universal basic income would have the effects of compressing income around the center. However, it is highly unlikely that the first order growth effect will be particularly strong. The growth, if any, will take time to foment and cannot simply be achieved by shifting money to classes with higher marginal propensities to consume. Thus, universal basic income will probably cause a transitive increase in the price level, regardless of its overall effect on inflation”

econometric


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