Monthly Archives: April 2009

Inflation = Increase in Money Supply

The Original Definition of Inflation Almost two centuries ago, the word inflation meant an increase in the money supply. Increasing the supply of any commodity (including money) causes its economic value to go down, but this effect comes only later … Continue reading

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Macroeconomic Models, Feedback Loops, and Aggregate Decisions

An Economy Stalled? No matter how much the Fed injects money into the system, it doesn’t seem to be responding. The U.S. economy right now feels like an airplane that has just stalled: it’s still pointed up, but instead of … Continue reading

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What if the Fed Fails?

Past Performance is no Guarantee of Future Performance So far we have taken it for granted that the U.S. dollar has held its value and will continue to do so. We accept as natural the small daily fluctuations in its … Continue reading

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