The Flinchum File
Thoughtful Economic Analysis and Existential Opinions

Increase in money supply is terrifying

11/11/2008

If you are a supply-side economist, you believe personal behavior and economic performance can be controlled by tax rates. If you are a Keynesian economist, you believe economic performance can be controlled by fiscal policy, i.e., taxes and spending levels. If you are a monetarist, you are terrified by this chart, because an historic, astronomical increase in money supply like this is certain to create terrible inflation.

For the first time, I really hope the monetarists are wrong, but . . .

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