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That's kind of thinking takes quantity theory of money too seriously (axiomatically). Instead of looking if that has been true, you just assume that it must be
by nabla9 6y ago
That's kind of thinking takes quantity theory of money too seriously (axiomatically). Instead of looking if that has been true, you just assume that it must be true.
- jkhdigital 6y agoExcept that fiat money can be analyzed axiomatically, because it is essentially just numbers in a balanced double-entry ledger. The difficult part is in translating theorems into practical knowledge about the economy, but just because this is difficult doesn’t mean that the axiomatic approach is wrong.
- nabla9 6y ago> Except that fiat money can be analyzed axiomatically Not in a meaningful way. (meaningful = related to real economy). If you just look at the numbers in a silly accountant fashion, and population doubles, analysis is meaningless. You need want to keep money relatively stable (say 2% inflation) you need to keep adding money to match changes in demand or factors of production.