Monetary Policy

Mainstream economists believe that if government increases spending and injects new money into the economy, then productive wealth will follow. Austrian economists would like to differ.

The Federal Reserve might be experiencing a change of leadership, but the process of currency debasement that began more than a century ago continues.

The standard line among most economists is that deflation is as bad or even worse than inflation. In reality, the economy needs deflation now more than ever.

The standard line among most economists is that deflation is as bad or even worse than inflation. In reality, the economy needs deflation now more than ever.

Various inflation measures conceal more than they reveal, largely because they exclude measuring a large portion of high-inflation items.

Governments take valuable things like paper and minerals, stamp something on them, and call them money, in the process rendering these things almost worthless. Something is wrong with this picture.

Governments take valuable things like paper and minerals, stamp something on them, and call them money, in the process rendering these things almost worthless. Something is wrong with this picture.

Inflation is not neutral, it is a hidden tax, a distortion of entrepreneurial signals, and a corrosive force against social trust.

When inflation heats up because central banks hold interest rates to artificially low levels, the standard approach is for central banks to increase interest rates. The better policy is not to artificially manipulate interest rates at all.

Mainstream economists, not to mention most financial journalists, claim that deflation is as bad or worse than inflation. The Austrians know better. We need deflation and we need it now.