The Money Detectives #06 — Who Gets the New Money First?
When new money enters the economy, it does not reach everyone at the same time.
This comic introduces the Cantillon Effect—the idea that early recipients of newly created money can spend or invest before prices fully adjust, while later recipients may face higher prices before their own income catches up.
What This Comic Introduces
After reading, learners should understand that:
New money enters the economy through specific people, businesses, and institutions first.
Early recipients can gain additional purchasing power before prices fully rise.
Later recipients may face higher prices before receiving the same benefit.
This uneven process can contribute to a wider wealth gap over time.
Creating more currency can also dilute its purchasing power—much like adding more water to lemonade makes each cup weaker.
Money Detective Question
If prices rise before your income does, are you really better off?
Encourage learners to think about why the path new money takes through the economy can matter just as much as the amount created.
For deeper study: Continue with MLMF’s lesson on Money Creation & the Cantillon Effect and explore the Cantillon Effect Simulator.
