{"id":57559,"date":"2021-04-25T13:12:01","date_gmt":"2021-04-25T18:12:01","guid":{"rendered":"https:\/\/olduvai.ca\/?p=57559"},"modified":"2021-04-25T13:12:01","modified_gmt":"2021-04-25T18:12:01","slug":"a-dangerous-misunderstanding","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=57559","title":{"rendered":"A dangerous misunderstanding"},"content":{"rendered":"
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A dangerous misunderstanding<\/a><\/h3>\n<\/div>\n<\/div>\n<\/section>\n

How much money\u00a0should there be<\/em>\u00a0in the world?\u00a0 It is an interesting question; to which, at any time, there is a correct answer that is unknown to anyone.\u00a0 It is the amount at which money is able to perfectly perform its two key functions \u2013 being a medium of exchange\u00a0and<\/em>\u00a0a store of value.\u00a0 Too little money in circulation and it would cease being a fair store of value because its value would be\u00a0increasing<\/em>\u00a0\u2013 something that hasn\u2019t occurred in half a century.\u00a0 Most often, money ceases to be a store of value on the downside \u2013 losing its value \u2013 because it is far easier for states and banks to create new currency than it is to destroy it.<\/p>\n

In practice, whether there is too much, or not enough money in the system is largely a matter of political economy rather than science.\u00a0 There are two broad economic camps \u2013 Monetarists and Keynesians \u2013 which largely correspond to conservative and liberal politics.\u00a0 The conservative-monetarist camp has been arguing for more than a decade that there is too much money in a system which should have been allowed to fail back in 2008.\u00a0 The liberal-Keynesian camp in contrast, argues that the absence of productivity gains, inflation and wage growth pressure show that there is too little money in circulation.<\/p>\n

The liberal-Keynesian camp appears to be winning the argument for now.\u00a0 This is because the economic fallout from the pandemic and the response to it would \u2013 at least in the short-term \u2013 have been devastating were it not for the various grants, loans, bailouts, stimulus payments and public services spending embarked upon by states and central banks around the world.\u00a0 Moreover, by pumping trillions of newly created dollars into the system, the Biden administration may well create a short-term post-pandemic bounce which will prevent the immediate onset of depression.<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

A dangerous misunderstanding How much money\u00a0should there be\u00a0in the world?\u00a0 It is an interesting question; to which, at any time, there is a correct answer that is unknown to anyone.\u00a0 It is the amount at which money is able to perfectly perform its two key functions \u2013 being a medium of exchange\u00a0and\u00a0a store of value.\u00a0 […]<\/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":[63,124,31147,12584,426,467,11866,536,538,1234],"class_list":["post-57559","post","type-post","status-publish","format-standard","hentry","category-economics","tag-banks","tag-central-banks","tag-consciousness-of-sheep","tag-government-spending","tag-inflation","tag-keynesian-economics","tag-monetarism","tag-money","tag-money-printing","tag-stimulus"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/57559","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=57559"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/57559\/revisions"}],"predecessor-version":[{"id":57560,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/57559\/revisions\/57560"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=57559"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=57559"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=57559"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}