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Strategies & Market Trends : Heinz Blasnik- Views You Can Use

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To: Don Lloyd who wrote (2412)6/11/2003 7:20:11 PM
From: GraceZ  Read Replies (1) of 4905
 
>>>Increasing capital formation and increasing productivity => naturally falling prices. Such naturally falling prices don't impede economic growth<<<

This benefit spread is stopped in its tracks when the government increases the supply of money to try to stabilize the money prices of the productivity enhanced products.


Not the transactional balances needed for fair representation. Economic activity would be stopped in its tracks as was mentioned earlier in a post to you.

Besides, the eternal prosperity model can't be true, since rising individual wealth changes behavior regardless of money supply, and brings about behavior that undermine the premises of the model. Money supply can stay constant and still all the problems now attributed to excesses or dearths of money will occur. Instability in economics is due to human behavior whatever form that behavior chooses to take.
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