3 ms·
No, the correct way to do it is to reduce the size of the money supply, or at least slow its growth. Inflation is always and everywhere a monetary phenomenon.
by MisterMower 4y ago
No, the correct way to do it is to reduce the size of the money supply, or at least slow its growth.
Inflation is always and everywhere a monetary phenomenon.
- sb057 4y agoAll other factors being equal, that would be tantamount to reducing demand. Nominal prices would fall, yes (deflation), but a failure to increase supply would result in shortages. Shrinking the money supply would have quite a similar effect to price ceilings in this scenario.