SFDB had a long comment string on Monday for one of the posts. The comments were dominated by a back-and-forth with a number of questions being asked. One of the questions stood out, and I want to take a moment to think on the point being raised. One comentor asked, will the money injections into the financial system lead to hyper-inflation?
Now, I want to start off by saying that I'm not an economist. What I am is someone interested in finding out answers that affect us all. Probably the easiest to uderstand description of the processes going on (in terms of buying and spending in the economy at a broad level, not particular to the details of this crisis) is this Slate piece by Paul Krugman from 1998. Now, Krugman is reviled by the right. Hopefully, this won't stop readers, because the article I am linking to is practically non-political.
I say practically, because to any lay reader, the political positions laid out are almost imperceptible. Even you can perceive them, it is important to understand that the verdict is out on the dynamic of a market like this from loud partisans on the right and the left. No one has said it as clearly as the very right-wing American Enterprise Institute, inflation is better than deflation.
Quantitatively ease away, Mr. Bernanke.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment