What Causes Stagflation?

Posted by freedomforall 1 day, 15 hours ago to Economics
1 comments | Share | Flag

Excerpt:
"In a market economy, a producer usually exchanges his goods and services for money. He then exchanges the money received for the goods and services of other producers. Alternatively, we can say that an exchange of something for something takes place by means of money.

Things are, however, not quite the same once money is generated out of “thin air” by inflation because of the expansionary central bank policies. Once inflation is employed, it sets in motion an exchange of nothing for something. This amounts to a diversion of resources from wealth-generators to the holders of the newly-generated money. In the process, wealth-generators are left with fewer resources at their disposal, which, in turn, weakens their ability to grow the economy."
SOURCE URL: https://mises.org/mises-wire/what-causes-stagflation-0


Add Comment

FORMATTING HELP

All Comments Hide marked as read Mark all as read


FORMATTING HELP

  • Comment hidden. Undo