Economic growth results from increasing production, and the money supply is always sufficient to foster exchange. The boom-bust cycle only occurs when production is distorted by a growing money supply.
The massive bailout of indebted sectors that already had overcapacity and were in process of obsolescence may also drive the largest wave of malinvestment in decades. If the previous recoveries came with poor wage and capital expenditure growth and high debt, the next one will likely be even...
Now, more than ever, we're in uncharted waters when it comes to central banks and monetary policy. Economist Brendan Brown takes a look at where we are and what the future might hold for central banks' race to the bottom.
In this crisis the money supply has already increased far more than during the last crisis. But it's hard to say when this will produce inflation because we're still in the midst of a demand shock and a collapse in oil prices.