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My economics professor keeps saying economic growth causes price inflation. Something about this does not make sense to me. If the economy is more productive, then the supply of goods is greater, so would not prices (assuming the money supply is stable) actually drop? He would argue that it is aggregate...
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Their subsidization of solar panel production is, believe it or not, has little or no impact on the pace of solar energy research and development. If they subsidized the production of cell phones, new faster, smaller, more reliable cell phones would still be coming out every year. The only difference...
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Is it just me, or does Walras' Law disprove underconsumptionist and "deficient aggregate demand" theories of business cycles? If the sum of all excess demand and excess supply is zero, then there can be no excess aggregate supply. Instead, this would imply that business cycles are the result...
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You said : These are fundamental and rather simple distinctions. Keynes believes "animal spirits" cause endogenous demand shocks. Austrians, and Say, argue that endogenous demand shocks are impossible in a truly free market economy, with the exception of either government interventions or natural...