Subject:
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Re: stuff (was: Art Debate Was: [Re: Swearing?])
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Newsgroups:
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lugnet.off-topic.debate
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Date:
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Fri, 21 Jan 2000 20:29:03 GMT
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Reply-To:
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lpieniazek@novera.comNOSPAM
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Viewed:
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2502 times
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Jasper Janssen wrote:
> When there is production that is going unbought because money that
> would have been used for consumption (in addition to there being
> larger production), you get inflation. *shrug*. Fairly basic tenet,
> isn't it?
Actually, no. See, for example, any first year Macroeconomics text, for
example Samuelson. Excess production (that is, more goods than wages)
causes deflation. Excess consumption (that is, more wages than goods)
causes inflation.
Now, it so happens that I feel that text, and others of its ilk, are
fatally flawed and happen to be wrong. But if you're going to quote
discredited theories and conventional wisdom, you might want to get the
sign right.
> How on earth you'd get deflation from incenting investment is beyond
> me.
Again, conventional theory says that decreasing the cost of producing
goods causes deflation.
--
Larry Pieniazek - larryp@novera.com - http://my.voyager.net/lar
http://www.mercator.com. Mercator, the e-business transformation company
fund Lugnet(tm): http://www.ebates.com/ ref: lar, 1/2 $$ to lugnet.
Note: this is a family forum!
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