Monday, 24 April 2017

Blog

Inflation: Watering Down the Punch

Posted by Tom Duncan
July 30, 2010

“With the recent financial crisis macroeconomic issues are receiving more and more attention. Inflation is one of those issues. Many claim inflation to be the cause of the crisis; which has even given the Austrian business cycle theory attention from the media. The theory states that an increase in the money supply causes a false appearance of savings and thus investment. This leads to mal-investment in certain industries, in the recent crisis it would be the housing market, eventually popping the bubble leading to a recession while the market reallocates resources to their truly valued ends.” Read more.

Nicholas Snow
From the Archives, July 30, 2010.