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Are you looking for a mathematical proof or what? A convincing demonstration should be enough. So far, all I've seen was along the lines: "there is only that much money chasing that much goods, so all the prices cannot rise". Come on, money is not consumed during trade, the same dollar (or oz) can be used over and over, so even if entire
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Smiling Dave: As AE teaches, prices are determined by personal preferences [among other things], which show up in the concept called "demand". Almost forgot to address this. In my question I postulated constant (not changing across possible worlds) preferences. Basically, I feel intuitively that prices are somehow determined by the complex
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@Esuric: with all respect, merely repeating a statement is not proving it. @Bohemian: "inflation is defined by monetary expansion" - I was careful to distinguish between monetary inflation and price inflation. @Smiling Dave: "then after the frisbees are bought, there is 960 bucks left for 980 objects." - I think there are still 1000
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... regulation prohibited such "risky and unethical" research today ... We are so fortunate to have this regulation thingy.
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As a quick example of what I am talking about: Let's say the whole economy consists of Crusoe and Friday (I know, 2 persons do not need money, but I believe this argument scales up to any number of participants). Crusoe can sell a goat to Friday for 10 coins, then Friday can sell 10 apples to Crusoe for 10 coins. What precludes replacing 10 coins
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Thank you all for your input. I probably need to clarify my question. Imagine an economy with a very stable (constant): technology, natural conditions, capital goods, human preferences, and monetary base. Is then price of every good/service in the economy strictly determined by these conditions? Or there may be multiple possible worlds, differing only
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Being 33, I am probably in the top percentile of the forum :) I have MS in computer science, and working in software engineering since around 1997. Since I live in Latvia, my salary is really irrelevant (and ridiculous by the US standards). Having said that, my purhase power for local stuff is comparable to that of my colleagues from Silicon Valley
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When discussing evils of governments with people, one issue keeps popping up - "but the government provides for the old!". While I have a lot of arguments, like the government's stolen from these old when they were young, preventing them from saving for themselves; or that in a freer economy people would have much more money to spend on
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While reading " The Case for Legalizing Capitalism " by Kel Kelly, I stumbled upon a claim, which I interpret as "it's impossible for all prices in an economy to grow without monetary base growing". I've re-read pages around page 130 several times, but I still do not see any sound explanation of this. Is this a known theorem
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In the bathtub? Wouldn’t that drown the baby? Of course not. The baby spent ~9 month swimming, having the lungs filled with liquid since their development. The baby still gets oxygen through umbilical cord until it is severed.