I couldn’t find an answer for this. I don’t know if it is from Milton Friedman himself or is it a general theory that 2-3% is “good for the economy.” There are many parties in an econnomy so the question it is good for whom exactly? What is the thesis and antithesis of this theory?

I’ll answer this is terms of gold and bitcoin. There is, in the universe and on our planet, a finite supply of gold. Yet the value of gold will continue to fluctuate because the demand for gold will always change, and price is a function of both supply and demand together. Same is true of bitcoi…

yields relative price inflation and therefore relative structural imbalances which must be liquidated. I don’t quite understand this grammatical structure. I’m not a native speaker. Thanks!

Sorry. This quotation system seems not work for me.

Anenome, Your explanation is clean and clear. There’s literally no reason why you’d want the money supply to remain at zero % inflation or deflation. I only don’t get this sentence and how it connects to the rest of your post. If there is a constant deflation in the economy (wage cuts every ye…

Perhaps you’re right, but this would actually be a positive outcome. It would mean that those with existing wealth would tend to gain more wealth over time just by sitting back and doing nothing. Which means that there would be a benefit to being rich and saving capital, making more productive capi…

Thanks for your detailed answer Anenome! Actually where can I read more /see more of your deflation theory? A short video presentation os preferable to a long book. :slight_smile: Thanks! The common wisdom says deflation is the worst thing that can happen to an economy: People will not buy stuff,…

Btw. interesting tidbits about gold hoarding (deflation?) by film maker Paul Grignon (in the LETS thread): https://forum.freecapitalists.org/t/lets-local-exchange-trading-systems-local-money-the-swiss-wir-system-etc/24618/2

OK. I was thinking about it. Gold simply can’t be so much more expensive over time even if it’s scarce: it is just one of the commodities, there are others as well: silver, palladium, etc. Sure, the price can go up but I can’t imagine it goes up by a magnitude or two.

You’re welcome :slight_smile: Inflation in theory is part of any basic econ text. The cause of it is very simple: printing more dollars. The effects of it are subtle, various, and pernicious. Here’s Hazlitt’s book intro to econ: Economics in One Lesson If you keep delving into libertarianism you…

Monetarist myth that 2-3% inflation is good for the economy? The Austrian view?

Economics Economics Questions

Tex2002ans October 16, 2012, 8:36pm 10

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Monetarist myth that 2-3% inflation is good for the economy? The Austrian view?

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