Economics Questions

Re: "Inflation"- A Better Definition?

nirgrahamUK — Mon, 15 Jun 2009 21:00:20 GMT

biased opinion

Re: "Inflation"- A Better Definition?

scineram — Mon, 15 Jun 2009 19:57:39 GMT

Nonsense, more like history. The latter sentence at least.

Re: "Inflation"- A Better Definition?

nirgrahamUK — Mon, 15 Jun 2009 16:07:43 GMT

scineram:
If one were to imagine that shopkeepers in the
U.S. today were obliged to make change with euro coins, one would have
some idea of the costs in question, and of the nuisance they would
entail. Indeed, many nations, the U.S. among them, have at some point
in their histories had to rely on various foreign coins for some or all of
their payments, and it was problems posed by the ensuing, non-par
exchanges that supplied the greatest impetus for efforts to establish
complete and uniform domestic coinage systems.

this is politics not economics.

Re: "Inflation"- A Better Definition?

scineram — Mon, 15 Jun 2009 10:22:54 GMT

It would have lessened the problem, but hardly a satisfactory solution, for

Although he condemns bimet-
allism Rothbard (1974, n. 9) sees nothing wrong with parallel standards,
which he regards as being both workable and more consistent with a
truly free market approach to money; and although he never says so
explicitly, Rothbard may have regarded parallel standards as satisfactory
means for addressing the small change problem.
But while a “parallel” small change system would indeed be
immune to Gresham’s Law, such a system would involve high costs of
transacting, for change would have to be made using coins of a standard
money different from that on which the economy’s principle exchange
media would be based. If one were to imagine that shopkeepers in the
U.S. today were obliged to make change with euro coins, one would have
some idea of the costs in question, and of the nuisance they would
entail. Indeed, many nations, the U.S. among them, have at some point
in their histories had to rely on various foreign coins for some or all of
their payments, and it was problems posed by the ensuing, non-par
exchanges that supplied the greatest impetus for efforts to establish
complete and uniform domestic coinage systems. The American
colonists, for example, were forced to rely on Spanish silver coins for rou-
tine payments, while keeping accounts in English monetary units; and a
desire to escape the inconveniences of this state of affairs was among the
chief motivations behind the post-revolutionary drive to establish a
national coinage (cf. Carothers 1930, pp. 33–34).

Re: "Inflation"- A Better Definition?

Juan — Mon, 15 Jun 2009 03:40:59 GMT

WisR:
Especially today with modern chicken skinning devices, it would be incredibly easy to substitute 'grains of gold' or whatever measures of weight for dollars in electronic, debit card transactions.

Indeed !

Now, as for Selgin's article, here's an interesting note

Selgin:
In the first decades of the Industrial Revolution, Great Britain was confronted by a very serious small change shortage. The bimetallic legislation then in effect undervalued silver, so that few if any silver coins were minted, while those already in circulation tended either to be melted into bullion or to be very badly impaired.

It's kinda obvious that the shortage was created by the gov't itself (no wonder eh?). So remove gov't regulations and you have a free-market bimetallic system which solves the problem without using the fiduciary media Selgin so much loves.

Re: "Inflation"- A Better Definition?

WisR — Mon, 15 Jun 2009 02:12:46 GMT

scineram:

The point of the article was to provide arguments for the assertion. And they were good ones.

And Juan's point is that there is more than one way to skin a chicken.

Especially today with modern chicken skinning devices, it would be incredibly easy to substitute 'grains of gold' or whatever measures of weight for dollars in electronic, debit card transactions. In fact, as you know, the infrastructure is already there to do so (to have small debit based transactions w/o fractional reserve banking) throughout most of the developed world.

Re: "Inflation"- A Better Definition?

scineram — Sun, 14 Jun 2009 23:48:38 GMT

The point of the article was to provide arguments for the assertion. And they were good ones.

Re: "Inflation"- A Better Definition?

Juan — Sun, 14 Jun 2009 23:26:12 GMT

No, I don't care to refute baseless assertions. Here : if the wright brothers never existed we would have no planes. Care to refute it ?

Re: "Inflation"- A Better Definition?

scineram — Sun, 14 Jun 2009 23:19:50 GMT

Care to refute it? Submit it to QJAE?

Re: "Inflation"- A Better Definition?

Juan — Sun, 14 Jun 2009 23:05:41 GMT

scineram:
But the point is fractional reserves were required for a solution.

Wholly false. Also, the melodramatic tone is a joke

Selgin:
In particular, privately-supplied, fiduciary token coins played a crucial part in Great Britain’s Industrial Revolution, which might not have been possible without them.

So scary!! Had there been no counterfeiters the industrial revolution would not have existed ! What a truly scientific assertion...

Re: "Inflation"- A Better Definition?

job86 — Sun, 14 Jun 2009 14:07:23 GMT

I agree that wants are unlimited. Well, if we were to use the standard neo-classic microeconomic term of demand you'd have take the budgetconstraints into consideration.

Demand defined as wants backed up with purchasingpower is limited to the extent that we can produce goods and services.

Re: "Inflation"- A Better Definition?

tacoface — Sun, 14 Jun 2009 13:59:19 GMT

demand is unlimited...it has nothing to do with payment.

Re: "Inflation"- A Better Definition?

job86 — Sun, 14 Jun 2009 13:45:41 GMT

Spideynw:
Prices can go up if demand increases or if supply decreases. Expansion of the money supply only explains the demand side of things, not the supply side.

Can demand ever increase without the corresponding increase in supply? Sure people may want more goods but for them to be able to demand more goods they would have to back it up with an increased ability to pay for them. That increased ability to pay for more goods have to come from an increase in production, given no wealth distribution through moneyprinting has occured... right?

Don't you have to reject Says law for that statement to be true. Correct me if I'm wrong.

Re: "Inflation"- A Better Definition?

scineram — Sun, 14 Jun 2009 12:19:56 GMT

JonBostwick:
Good article, but its not about a shortage of money. Its about a shortage of a particular denomination.

Fair enough. But the point is fractional reserves were required for a solution.

Re: "Inflation"- A Better Definition?

scineram — Sun, 14 Jun 2009 12:18:50 GMT

Juan:
You know, before downloading that I knew it was an article from Selgin....

And the point being?