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I'm involved in a discussion elsewhere in which my antagonist asserted that the money supply needs to grow in order to support/enable economic growth. Without a growing money supply, the economy cannot grow. Of course, I retorted by saying that as long as prices can adjust downwards, there's no reason in theory why any particular sized economy
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Ah, well I think I can answer my own question, at least in part. That wiki article uses nominal measures of economic activity and therefore ignoring the fact that prior to WWI, there was virtually no inflation and several periods of deflation which have the effect of making the recessions look worse, particularly when comparing them to the post war
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I have heard it said that prior to the great depression, governments tended to let markets self correct and after they have always intervened in order to help them recover. However, this list of US recessions on wiki seems to suggest that recessions before the great depression were longer, more severe and more frequent. That is, of course, ignoring
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Aren't they misunderstanding the Keynesian notion of the "liquidity trap" anyway? I thought Keynesians were worried about people hoarding savings rather than investing. But money in the bank is being invested, right? Therefore penalising savers telling them they should spend to help the economy is missing the point. Not that I agree with
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An Interesting article on the UK this morning: Savers told to stop moaning and start spending Allow to me to provide an extract: [quote]Savers should stop complaining about poor returns and start spending to help the economy, a senior Bank of England official warned today. Older households could afford to suffer because they had benefited from previous
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[quote user="Leviathan"]For example, income redistribution serves various efficiency purposes in the capitalist economy, with progressive taxation taking advantage of the fact that diminishing marginal utility means that money is of less value to the wealthy few than to the masses of the working class, and sustaining their physical efficiency
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JeffB [quote]That may well be true, but the other poster, chap08, was contending that the Fed had deliberately raised rates...[/quote] Yes, the Fed deliberately raised it's discount rate but that this was in response to the economic circumstances, the same economic circumstances that led to the recession.
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I am no expert by any means but I don't see how that argument undermines the Austrian argument. The point is that the malinvestments (brought about by the post war inflation) led to the evaporation of investment funding which caused the recession and interest rates to rise. The fact that interest rates rose one month before the recession officially
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I don't think she was a supported of Austrian economics despite being influenced by Hayek. She was the first prime minister in decades who started trying to reign in inflation. She started the reversal of the trend of nationalisation with a broad programme of privatisation and she challenged and weakened the union stranglehold that it had on the
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[quote user="fsk"]"There's no such thing as private property" is stupid. If it's immoral to defend my property, then what incentive is there for me to build a house, plant crops, or do any useful work?[/quote] The author of the article was only trying to refute the liberatrian principle of non-aggression. One can always abandon