{"id":23549,"date":"2017-04-14T08:42:25","date_gmt":"2017-04-14T13:42:25","guid":{"rendered":"http:\/\/olduvai.ca\/?p=23549"},"modified":"2017-04-14T08:42:25","modified_gmt":"2017-04-14T13:42:25","slug":"what-should-be-the-correct-money-supply-growth-rate","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=23549","title":{"rendered":"What Should Be the Correct Money Supply Growth Rate?"},"content":{"rendered":"<header class=\"wrapper entry-header page-header\">\n<div class=\"title-with-sep single-title\">\n<h3 class=\"entry-title\"><a href=\"http:\/\/www.cobdencentre.org\/2017\/04\/what-should-be-the-correct-money-supply-growth-rate\/\">WHAT SHOULD BE THE CORRECT MONEY SUPPLY GROWTH RATE?<\/a><\/h3>\n<\/div>\n<\/header>\n<div class=\"wrapper\">\n<div class=\"grids\">\n<div class=\"grid-8 column-1\">\n<div class=\"single-box clearfix entry-content\">\n<p>Most economists believe that a growing economy requires a growing money stock, on grounds that growth gives rise to a greater demand for money, which must be accommodated.<\/p>\n<p>Failing to do so, it is maintained, will lead to a decline in the prices of goods and services, which in turn will destabilize the economy and lead to an economic recession or, even worse, depression.<\/p>\n<p>Since growth in money supply is of such importance, it is not surprising that economists are continuously searching for the right, or the optimum, growth rate of the money supply.<\/p>\n<p>Some economists who are the followers of Milton Friedman \u2013 also known as monetarists \u2013 want the central bank to target the money supply growth rate to a fixed percentage. They hold that if this percentage is maintained over a prolonged period of time it will usher in an era of economic stability.<\/p>\n<p>The idea that money must grow in order to sustain economic growth gives the impression that money somehow sustains economic activity.<\/p>\n<p>According to Rothbard,<\/p>\n<blockquote><p>Money, <em>per se<\/em>, cannot be consumed and cannot be used directly as a producers\u2019 good in the productive process. Money <em>per se <\/em>is therefore unproductive; it is dead stock and produces nothing<a href=\"http:\/\/www.cobdencentre.org\/2017\/04\/what-should-be-the-correct-money-supply-growth-rate\/#_ftn1\" name=\"_ftnref1\">[1]<\/a>.<\/p><\/blockquote>\n<p>Money\u2019s main job is simply to fulfill the role of the medium of exchange. Money doesn\u2019t sustain or fund real economic activity. The means of sustenance, or funding, is provided by saved real goods and services. By fulfilling its role as a medium of exchange, money just facilitates the flow of goods and services between producers and consumers.<\/p>\n<p>Historically, many different goods have been used as the medium of exchange. On this, Mises observed that, over time,<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>WHAT SHOULD BE THE CORRECT MONEY SUPPLY GROWTH RATE? Most economists believe that a growing economy requires a growing money stock, on grounds that growth gives rise to a greater demand for money, which must be accommodated. Failing to do so, it is maintained, will lead to a decline in the prices of goods and [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[124,2310,966,2586,536,15101,954,545,1264],"class_list":["post-23549","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-depression","tag-ludwig-von-mises","tag-milton-friedman","tag-money","tag-money-growth-rate","tag-money-supply","tag-murray-rothbard","tag-recession"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/23549","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=23549"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/23549\/revisions"}],"predecessor-version":[{"id":23551,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/23549\/revisions\/23551"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=23549"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=23549"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=23549"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}