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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: DuckTapeSunroof who wrote (25705)	2/4/2008 5:51:34 PM
From: TimF	Respond to of 71588

Even in the longer term I'd say the money supply is decisive, but a static supply of money is not needed (or desired) in order to avoid inflation), money supply going up at the long term average of total output would tend to be neutral for the currency , while a static money supply would be deflationary. Of course the problem (other than all the political reasons to inflate the money supply) is that its hard to tell how much the economy is growing or has grown with great precision, and of course much harder to tell how much it will grow. Also an argument can be made (I'm neither endorsing nor opposing the argument at this time), that stickiness in wages, means a very small amount of inflation is on the net a good thing.