Can an increase in the demand for money neutralize the effect of a corresponding increase in money supply?
According to popular thinking, not every increase in the supply of money will have an effect on the production of goods. For instance,…
Why the present monetary system is heading for a breakdown
Most economists hold that a growing economy requires a growing money stock, on grounds that growth gives rise to a greater demand for money,…
Savings the heart of economic activity
It is held by most mainstream economists that spending is the heart of economic activity. Economic activity is depicted as a circular flow…
Importance of a theory in economics
It is a common belief that sound economics must be based on facts and not on theoretical reasoning as such. Some commentators are…
The essence of inflation
The popular definition cannot explain why inflation is bad According to the popular way of thinking, inflation is defined as a general increase…
Lockdowns and the economy
The imposition of lockdowns to counter the spread of the infection from the coronavirus is likely to severely damage the real economy. As…
Cost cutting and economic growth
Some commentators regard cost cutting by companies in order to secure profits as a major threat to the economy. They hold that if…
The questionable role of quantitative methods in economics
Most economists consider the use of sophisticated mathematical and statistical methods key towards understanding the complexities of economics. They are of the view that…
Government budget deficit and economic growth
The US budget had a deficit of $32.6 billion in January compared with a deficit of $13.3 billion in December and a surplus…
Why banks are not lenders as such?
According to the popular way of thinking the subject matter of lending is banking activity. It is banks, so it is held that…