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Recent Posts

The dangers of deflation, or why Ron Paul and the Austrians are wrong

Long story short: Though a desire for deflation, and a fear of inflation, may have some plausibility at face value, when examined from the perspective of the economy as a whole (and I scarcely doubt that anyone thinks this isn’t what policymakers should be concerned most about), a categorical fear of inflation, and a desire for deflation, aka “a strong dollar,” is entirely wrong-headed. Austrians, including Peter Schiff and Robert P. Murphy, have fallen for this intuitive trap. A sudden drop in prices in the economy will cause sudden, needless unemployment and an idling of scarce resources which have alternative [...]

Inflation & Deflation 3: Obama Stimulus Plan

Is the stimulus large enough to offset the demand shock caused by the contraction in credit? Will it lead to [...]