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#61
10-20-2007, 02:25 PM
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Re: If the Gold standard came back ...
[ QUOTE ]
[ QUOTE ] He has all the necessary knowledge to get it right, lays it out for you, puts it in the correct order even... and then just misses it. If M, V and P are held constant then Q cannot grow, but deflation is a decrease in P, which is on the same side as Q so a decrease in P leads to an increase in Q! [/ QUOTE ] lol, wow! [/ QUOTE ] What you are both missing is that deflation (a decrease in P) is undesirable in and of itself for the many reasons discussed elsewhere. He is holding P (relatively) constant because that is the main objective of monetary policy. 
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#62
10-20-2007, 02:35 PM
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Re: If the Gold standard came back ...
[ QUOTE ]
[ QUOTE ] [ QUOTE ] He has all the necessary knowledge to get it right, lays it out for you, puts it in the correct order even... and then just misses it. If M, V and P are held constant then Q cannot grow, but deflation is a decrease in P, which is on the same side as Q so a decrease in P leads to an increase in Q! [/ QUOTE ] lol, wow! [/ QUOTE ] What you are both missing is that deflation (a decrease in P) is undesirable in and of itself for the many reasons discussed elsewhere. He is holding P (relatively) constant because that is the main objective of monetary policy. [/ QUOTE ] Can you explain why prices lowering is a bad thing?
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#63
10-20-2007, 02:38 PM
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Re: If the Gold standard came back ...
[ QUOTE ]
[ QUOTE ] [ QUOTE ] He has all the necessary knowledge to get it right, lays it out for you, puts it in the correct order even... and then just misses it. If M, V and P are held constant then Q cannot grow, but deflation is a decrease in P, which is on the same side as Q so a decrease in P leads to an increase in Q! [/ QUOTE ] lol, wow! [/ QUOTE ] What you are both missing is that deflation (a decrease in P) is undesirable to me for the many reasons discussed elsewhere. He is holding P (relatively) constant because that is the main objective of monetary policy. [/ QUOTE ] FYP
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#64
10-20-2007, 03:06 PM
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Re: If the Gold standard came back ...
[ QUOTE ]
[ QUOTE ] [ QUOTE ] [ QUOTE ] He has all the necessary knowledge to get it right, lays it out for you, puts it in the correct order even... and then just misses it. If M, V and P are held constant then Q cannot grow, but deflation is a decrease in P, which is on the same side as Q so a decrease in P leads to an increase in Q! [/ QUOTE ] lol, wow! [/ QUOTE ] What you are both missing is that deflation (a decrease in P) is undesirable in and of itself for the many reasons discussed elsewhere. He is holding P (relatively) constant because that is the main objective of monetary policy. [/ QUOTE ] Can you explain why prices lowering is a bad thing? [/ QUOTE ] Do a 2+2 search on deflation, there are numerous lengthy threads on it. There main problems: wages are not downwardly elastic, the effect of devaluation of inventories on durable goods and the 0% floor on interest rates. Deflation leads to downward spirals in prices, output, wages and employment.
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#65
10-20-2007, 03:08 PM
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Re: If the Gold standard came back ...
[ QUOTE ]
[ QUOTE ] [ QUOTE ] He has all the necessary knowledge to get it right, lays it out for you, puts it in the correct order even... and then just misses it. If M, V and P are held constant then Q cannot grow, but deflation is a decrease in P, which is on the same side as Q so a decrease in P leads to an increase in Q! [/ QUOTE ] lol, wow! [/ QUOTE ] What you are both missing is that deflation (a decrease in P) is undesirable in and of itself for the many reasons discussed elsewhere. He is holding P (relatively) constant because that is the main objective of monetary policy. [/ QUOTE ] The funny thing was not that what he said wasnt true. The funny thing was that the math he tried to argue was completely illogical and yet it didnt phase him one bit. It really makes me question why he came to the conclusions that he did.
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#66
10-20-2007, 03:10 PM
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Re: If the Gold standard came back ...
[ QUOTE ]
[ QUOTE ] [ QUOTE ] [ QUOTE ] He has all the necessary knowledge to get it right, lays it out for you, puts it in the correct order even... and then just misses it. If M, V and P are held constant then Q cannot grow, but deflation is a decrease in P, which is on the same side as Q so a decrease in P leads to an increase in Q! [/ QUOTE ] lol, wow! [/ QUOTE ] What you are both missing is that deflation (a decrease in P) is undesirable in and of itself for the many reasons discussed elsewhere. He is holding P (relatively) constant because that is the main objective of monetary policy. [/ QUOTE ] The funny thing was not that what he said wasnt true. The funny thing was that the math he tried to argue was completely illogical and yet it didnt phase him one bit. It really makes me question why he came to the conclusions that he did. [/ QUOTE ] the math isnt "illogical"
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#67
10-20-2007, 04:28 PM
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Re: If the Gold standard came back ...
[ QUOTE ]
He has all the necessary knowledge to get it right, lays it out for you, puts it in the correct order even... and then just misses it. If M, V and P are held constant then Q cannot grow, but deflation is a decrease in P, which is on the same side as Q so a decrease in P leads to an increase in Q! [/ QUOTE ] Deflation is a decrease in M, not a decrease in P.
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#68
10-20-2007, 05:13 PM
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Re: If the Gold standard came back ...
[ QUOTE ]
[ QUOTE ] He has all the necessary knowledge to get it right, lays it out for you, puts it in the correct order even... and then just misses it. If M, V and P are held constant then Q cannot grow, but deflation is a decrease in P, which is on the same side as Q so a decrease in P leads to an increase in Q! [/ QUOTE ] Deflation is a decrease in M, not a decrease in P. [/ QUOTE ] If you are talking about deflating the money supply then it is, but under a gold standard the money supply would be relatively stable no?
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#69
10-20-2007, 06:04 PM
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Re: If the Gold standard came back ...
[ QUOTE ]
[ QUOTE ] He has all the necessary knowledge to get it right, lays it out for you, puts it in the correct order even... and then just misses it. If M, V and P are held constant then Q cannot grow, but deflation is a decrease in P, which is on the same side as Q so a decrease in P leads to an increase in Q! [/ QUOTE ] Deflation is a decrease in M, not a decrease in P. [/ QUOTE ] While I can agree that the correct definition of deflation/inflation is in relation to the money supply, that is clearly not the definition used by the author of the article.
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#70
10-20-2007, 10:09 PM
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Re: If the Gold standard came back ...
[ QUOTE ]
[ QUOTE ] [ QUOTE ] He has all the necessary knowledge to get it right, lays it out for you, puts it in the correct order even... and then just misses it. If M, V and P are held constant then Q cannot grow, but deflation is a decrease in P, which is on the same side as Q so a decrease in P leads to an increase in Q! [/ QUOTE ] Deflation is a decrease in M, not a decrease in P. [/ QUOTE ] If you are talking about deflating the money supply then it is, but under a gold standard the money supply would be relatively stable no? [/ QUOTE ] No, the money supply is relative to the total amount of goods and services you can buy with that money. Increasing that while keeping the same number of dollars is a drop in M.
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Linear Mode
