tag:blogger.com,1999:blog-2098432983500045934.post4673923335531538375..comments2024-03-12T22:19:32.339-04:00Comments on The New Arthurian Economics: Economists know about the crisis. They know they missed a big one. They know they misunderstand something. Yet they go back to the same old song and dance.The Arthurianhttp://www.blogger.com/profile/16501331051089400601noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-2098432983500045934.post-30695560055305864182014-08-29T04:21:15.480-04:002014-08-29T04:21:15.480-04:00Auburn, it occurs to me that your observation --
...Auburn, it occurs to me that your observation --<br /><br /><b>Reducing the money supply does seem to correspond to decreasing inflation... [but] increasing the money supply seems to have a much smaller correlation (if any) to increasing inflation.</b><br /><br />-- perfectly matches the "pushing on a string" analogy. Reducing the money supply is like pulling on a string. It is effective. But increasing the money supply is like pushing on a string. It doesn't really work.<br /><br />If there is a balloon on the other end of the string, and you are letting out string, you still have to hope there is enough helium in the balloon to make the thing rise.<br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-34477915202755996912014-08-28T18:04:55.630-04:002014-08-28T18:04:55.630-04:00Thanks Auburn.
Hey, I must have looked at a thous...Thanks Auburn.<br /><br />Hey, I must have looked at a thousand different graphs of debt, but I don't think I ever looked at one showing debt and inflation. Good one!<br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-17098929997729155912014-08-28T08:46:05.021-04:002014-08-28T08:46:05.021-04:00Great Post Arthurian. I too am extremely skeptical...Great Post Arthurian. I too am extremely skeptical about the efficacy of raising interest rates to combat inflation.<br /><br />Reducing the money supply does seem to correspond to decreasing inflation:<br /><br />https://research.stlouisfed.org/fred2/graph/?graph_id=189858&category_id=<br /><br />Although strangely enough, increasing the money supply seems to have a much smaller correlation (if any) to increasing inflation.Anonymoushttps://www.blogger.com/profile/15433129947896088098noreply@blogger.com