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Post WWII inflation

Post WWII inflation

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Jeff posted on Fri, Nov 28 2008 5:12 PM

Why wasn't there serious inflation after WWII? Wouldn't Austrian theory have predicted that? Is that scenario relevant to our current situation?

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krazy kaju replied on Fri, Nov 28 2008 5:17 PM

What time period after WWII? Why would Austrian theory predict that?

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Jeff replied on Fri, Nov 28 2008 5:25 PM

I'm assuming that the war was primarily financed by the Fed printing dollars, expanding its balance sheet. Isn't that inflationary according to Austrian theory?The time period would be the first decade after the war.

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krazy kaju replied on Fri, Nov 28 2008 7:35 PM

Well, do you know that your assumption was right? The Fed had to protect its gold exchange standard at that time. There was some inflation, though it was masked partially by price controls.

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