3 ms·

> We don't know and we'll never know. All you can do is tell just-so stories You can compare the permanent boom and bust cycle the global economy was in prior

by qwytw 3y ago

> We don't know and we'll never know. All you can do is tell just-so stories You can compare the permanent boom and bust cycle the global economy was in prior to the Great Depression to the relatively stable inflationary environment of the last several decades. Just look at: https://www.officialdata.org/us/inflation/1800?amount=1#:~:text=Value%20of%20%241%20from%201800,cumulative%20price%20increase%20of%202%2C295.52%25 https://www.officialdata.org/us/inflation/1800?amount=1#:~:t.... Specie based money (with not meaningful monetary policy) is not stable, in fact it's less stable than Fiat money it's just that periods of high inflation are followed by periods of very high deflation. And unpredictability is clearly an obvious downside... (to be fair I almost thoroughly disagree with your reasoning).

throw0101b 3y ago
See also Gold Standard CPI and post-2008 CPI (when there was much rending of garments over QE): * https://www.theatlantic.com/business/archive/2012/08/why-the-gold-standard-is-the-worlds-worst-economic-idea-in-2-charts/261552/ https://www.theatlantic.com/business/archive/2012/08/why-the... * https://archive.is/FWKcL https://archive.is/FWKcL
api 3y ago
Here's the problem: https://tylervigen.com/spurious-correlations https://tylervigen.com/spurious-correlations We can't run an experiment to determine causation. A lot of things happened since WWII. The whole way our government works shifted more toward centralization as a result of the war. Better information and communication technology could have allowed markets to operate more efficiently. Loads of European and Asian productivity was smashed in the war, distorting global trade toward America. A generation received a collective military experience. Women entered the workforce in large numbers. On and on and on...
- qwytw 3y ago
  > We can't run an experiment to determine causation. Just like with most/almost all complex systems. I don't see this as a good reason to handwave all the arguments or reasoning somebody happens to disagree with. There are two issues (and there is plenty of empirical evidence for them, since we've actually observed this): - Ensuring price/currency stability in a globalized market is almost impossible without very strict capital controls. You get long-term price stability at a cost of very high short term volatility that's a core feature of the gold standard in basically any non stagnant economy. High short term volatility leads to financial instability due to higher uncertainty etc. which again puts the economy in a permanent boom and bust cycle. - The ability of central banks to respond to economic crises is severely limited. Can't really use monetary policy to to stabilize the economy, stimulate growth or decrease unemployment are severely limited. Between the 1830s and 1930s there were three events which were called the 'Great depression' (well that is unless the next one when the previous one was renamed to something like the 'long' depression for instance...). How many 'economic depression' were there in the last 90 years?

by qwytw 3y ago

throw0101b 3y ago

See also Gold Standard CPI and post-2008 CPI (when there was much rending of garments over QE): * https://www.theatlantic.com/business/archive/2012/08/why-the-gold-standard-is-the-worlds-worst-economic-idea-in-2-charts/261552/ https://www.theatlantic.com/business/archive/2012/08/why-the... * https://archive.is/FWKcL https://archive.is/FWKcL

api 3y ago

Here's the problem: https://tylervigen.com/spurious-correlations https://tylervigen.com/spurious-correlations We can't run an experiment to determine causation. A lot of things happened since WWII. The whole way our government works shifted more toward centralization as a result of the war. Better information and communication technology could have allowed markets to operate more efficiently. Loads of European and Asian productivity was smashed in the war, distorting global trade toward America. A generation received a collective military experience. Women entered the workforce in large numbers. On and on and on...

qwytw 3y ago
> We can't run an experiment to determine causation. Just like with most/almost all complex systems. I don't see this as a good reason to handwave all the arguments or reasoning somebody happens to disagree with. There are two issues (and there is plenty of empirical evidence for them, since we've actually observed this): - Ensuring price/currency stability in a globalized market is almost impossible without very strict capital controls. You get long-term price stability at a cost of very high short term volatility that's a core feature of the gold standard in basically any non stagnant economy. High short term volatility leads to financial instability due to higher uncertainty etc. which again puts the economy in a permanent boom and bust cycle. - The ability of central banks to respond to economic crises is severely limited. Can't really use monetary policy to to stabilize the economy, stimulate growth or decrease unemployment are severely limited. Between the 1830s and 1930s there were three events which were called the 'Great depression' (well that is unless the next one when the previous one was renamed to something like the 'long' depression for instance...). How many 'economic depression' were there in the last 90 years?