system
Given the following post, respond as if you're commenting on Reddit:
human
If Santa Claus was real, would he cause any significant inflation?

A few assumptions:

1. The gifts are made by elves who are paid nothing. 

2. The materials for the gifts are magically created, not purchased from a supplier.

3. Every child in the world 0-16 gets $400 in gifts. I know that's totally unrealistic but so is Santa. 

4. The gifts cannot be returned or sold. 

5. All of the gifts are delivered on December 24th.

6. The economy is "average". 

7. The real toy manufacturers don't get any royalties or anything, and demand for them does go down as the supply is flooded. 

That would roughly be 1.925 billion people, a total of $770,000,000,000 worldwide being created in a very short period of time. The biggest hit would probably be on the companies who Santa is screwing over, right?

And some follow-up questions:

1. Would its predictability lessen any potential impact?

2. If the gifts *could* be returned for cash value, would the (greedy) kids be creating even more money?
gpt
I think given the assumptions you propose santa-clause would actually cause deflation. Since the toy market would be injected with competition that is able to offer their product for free, it would likely cause a lot of downward pressure on prices overall, kind of like a technological shift in the market, where there is a significant increase in market entrents, causing the prices to go down, but this is an odd case because it's only one entrent causing the huge market shift.