You betcha! Somehow people seem to overlook this effect whenever they talk this way about inflation. They also do not take into account of differing valuations when people think they have more money. The wealth effect is somewhat the same.

Rothbardian_fanatic

True true true -- I did call it an Angel Gabriel story, per Rothbard, so that nobody would confuse this hypothetical for credit creation in the real world. 

Still, the cantillon effect is a different rabbit hole and makes for somewhat different outcomes about who's harmed and who benefits

denlillaapan

econ

MONEY CLASS OF THE DAY: “The Cost of Living” Is a Stupid Phrase

Yes, this is true, but the new money never gets distributed evenly, as you postulate. The first receivers get the “more powerful money” first, spend it and get the full use of the uninflated money, but the bottom of the receiver stack gets the fully inflated money (worth less than the first receiver’s money). The “everybody gets the same doubled” just does not happen in the real world.