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The purpose of monetary policy is to stimulate the economy, i.e. increase the value of dollars that are invested in something. The fact that it decreases the v

• dragonwriter 4y ago
  > The purpose of monetary policy is to stimulate the economy no, its not. (1) Monetary policy doesn’t have just one purpose. (2) Sometimes one of its purposes is to slow rather than stimulate the econony. (3) Mostly its high-level purpose is economic stability.
  • ineptech 4y ago
    1) You responded as if I said, "the only purpose of monetary policy is to stimulate the economy as much as possible even if it introduces instability." Please don't do that. 2) You gotta read the thing I was replying to, and interpret my comment as a response to it, not as a standalone assertion. I think it's pretty obvious that I meant monetary policy resulting in inflation, as that's what they were complaining about, not all possible monetary policies in the abstract. The person I was replying to was saying that inflation is bad because it dilutes the value of savings, which is therefore sorta kinda like a tax. I'm saying, that's a terrible model; a better one is that monetary policy uses inflation to stimulate investment in order to grow the economy, and doesn't care if that dilutes your savings, because it wants you to invest those savings. If you disagree, say so, but argue with the whole thing, not with a sentence fragment taken out of context.