FIGURE 5-2: International Data on Inflation and Money Growth In this scatterplot, each point represents a country. The horizontal axis shows the average growth in the money supply (as measured by M2) during the period 2000 to 2013, and the vertical axis shows the average rate of inflation (as measured by the CPI). Once again, the positive correlation is evidence for the quantity theory’s prediction that high money growth leads to high inflation.

Data from: International Monetary Fund.