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Home | Library | The Causes of Price Inflation & Deflation: Fundamental Economic Principles the Deflationists Have Ignored

The Causes of Price Inflation & Deflation: Fundamental Economic Principles the Deflationists Have Ignored

May 8, 2011

Tags The FedMoney and Banking

Despite the fact the money supply has steadily grown since then, a number of commentators, purportedly sympathetic to the Austrian school, have doggedly clung to a prediction that prices-in-general will continue to fall. According to these authors, price deflation in the wake of the financial crisis was caused by an immense credit contraction, and prices cannot rise again unless credit expands, a prospect they see as unlikely. There are numerous faults with these arguments.


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References

Libertarian Papers, Vol. 3 (2011), Article No. 13