Free Republic
Browse · Search
Bloggers & Personal
Topics · Post Article

To: AK_47_7.62x39
But Austrian economics does not insist that this kind of inflation necessarily results in higher prices.

Higher prices is just a leading symptom of the disease of inflation , and not the cause of the disease or the disease itself. When one defines inflation as rising prices, people are led to mistakenly consider every possible cause of higher prices as a possible cause of inflation, and thus to mistakenly believe that the cause of inflation can vary from case to case.

The effect of believing that inflation can be caused by an extensive list of things that the mind has no clear-cut way of organizing or holding is that for all practical purposes people are led to regard inflation as causeless.

2 posted on 03/09/2014 9:18:44 AM PDT by mjp ((pro-{God, reality, reason, egoism, individualism, natural rights, limited government, capitalism}))
[ Post Reply | Private Reply | To 1 | View Replies ]


To: mjp
I believe there is a deliberate attempt (Krugman comes to mind) to jumble the historical definition of the word "inflation" with "price inflation."

"Inflation" is the increase in the money supply, and "price inflation" is one of the results of inflation. There is no 1:1 correlation and certainly no time bound correlation between the two, yet the correlation is there... it is simply not quantifiable, as so many things in economics are not quantifiable.

3 posted on 03/09/2014 9:22:41 AM PDT by AK_47_7.62x39
[ Post Reply | Private Reply | To 2 | View Replies ]

Free Republic
Browse · Search
Bloggers & Personal
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson