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Note that the main insight of this blog post, that recessions are caused by a society-wide preference for hoarding money rather than goods, is an insight that d
by topaz0 5y ago
Note that the main insight of this blog post, that recessions are caused by a society-wide preference for hoarding money rather than goods, is an insight that dates back to Karl Marx in the early 19th c. Earlier economic theorists had thought that recessions characterized by a general lack of demand were impossible in capitalism because every exchange supposedly involves items of equal value, but that fails to account for the asymmetric demand for money, due to its liquidity (and therefore relative lack of demand for goods/services).
- BenoitEssiambre 5y agoyeah, it's liquidity and network effects from people using it as an intermediate asset in every other transactions (instead of bartering directly). I didn't know Marx saw it that way. My inspiration comes from market monetarists of the Milton Friedman tradition.
- topaz0 5y agoThere's a lot of good stuff in Marx, whatever people say (and downvote). Whether or not you agree with the solutions he proposes.