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>You cannot seriously just increase a number in a computer somewhere or print a few notes and expect the economy or living standard to suddenly improve. You su

by ksk 9y ago

>You cannot seriously just increase a number in a computer somewhere or print a few notes and expect the economy or living standard to suddenly improve. You sure can. Mild inflation is useful on the macro scale (even though I'm a bit of a skeptic when it comes to a lot of macroeconomics). It increases aggregate demand which increases production, which improves the economy. A simple example is real-estate. There's inflation in the that market which is why it attracts investments, which increases demand with the developers, who then hire more people to build houses, etc etc. Further more, on a currency level, devaluing your currency makes your exports cheaper. If I was exporting my product for $2 which gave me 10 Franks, and now I get 20 Franks because of my currency being devalued, that's awesome as long as the devaluation happens slower than the inflation. Anyway, these are well established, and well understood economic concepts. Certainly, there is more nuance to them.

dmichulke 9y ago
> Mild inflation is useful on the macro scale I know this is mainstream economics but if you're an engineer you should ask "What is mild inflation? Where is the limit? What are the forces that equilibrate mild inflation" I know the theory behind it but it just doesn't make sense. Have you ever thought about why tech hardware thrives, yet we have heavy deflation? Should we put price controls there? Do you realize that whenever a big problem is solved (via the wheel, factories, cars, ...) the stuff deflates heavily? There are other theories out there that make much more sense than what is mainstream. > Further more, on a currency level, devaluing your currency makes your exports cheaper. Same here, following your advice everyone should devalue his currency, trying to outcompete other devaluing currencies. So how can we explain that Germany with its strong mark was such an economic power given the absence of mild inflation and currency devaluation? Finally and again, you think that printing a piece of paper (money) solves a problem? So we get "something for nothing"? If you want to know an alternative (and IMO much more consistent) view, read "Economics in One Lesson" by H. Hazlitt. Yes, the one that is 60 years old.

by ksk 9y ago

dmichulke 9y ago

> Mild inflation is useful on the macro scale I know this is mainstream economics but if you're an engineer you should ask "What is mild inflation? Where is the limit? What are the forces that equilibrate mild inflation" I know the theory behind it but it just doesn't make sense. Have you ever thought about why tech hardware thrives, yet we have heavy deflation? Should we put price controls there? Do you realize that whenever a big problem is solved (via the wheel, factories, cars, ...) the stuff deflates heavily? There are other theories out there that make much more sense than what is mainstream. > Further more, on a currency level, devaluing your currency makes your exports cheaper. Same here, following your advice everyone should devalue his currency, trying to outcompete other devaluing currencies. So how can we explain that Germany with its strong mark was such an economic power given the absence of mild inflation and currency devaluation? Finally and again, you think that printing a piece of paper (money) solves a problem? So we get "something for nothing"? If you want to know an alternative (and IMO much more consistent) view, read "Economics in One Lesson" by H. Hazlitt. Yes, the one that is 60 years old.