Timeline for From an economics perspective, what are the ramifications of a currency with fixed money supply?
Current License: CC BY-SA 3.0
8 events
| when toggle format | what | by | license | comment | |
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| Nov 21, 2014 at 23:28 | comment | added | FooBar | Right, I clarified that. | |
| Nov 21, 2014 at 23:28 | history | edited | FooBar | CC BY-SA 3.0 |
added 41 characters in body
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| Nov 21, 2014 at 23:19 | comment | added | 410 gone | If your currency increases in value, that's not inflation, that's deflation (I think you know that, but it's not explicit in your answer). You could get inflation, however, from an increased velocity of money, combined with fixed or declining GDP: but there is a limit there: the speed of a chain of transactions will cap the velocity. | |
| Nov 21, 2014 at 9:12 | comment | added | Corvus | @jasonnichols MV does not have an upper bound, or at least not a structural one. Not all transactions occur on the block chain. Off block chain payments are already possible. | |
| Nov 21, 2014 at 4:17 | comment | added | Jason Nichols | Given that V also has an upper bound, in that transactions are only recorded in the block chain at a fixed rate, MV has an upper bound, so perhaps I should have clarified, but structurally, since MV is bounded and Y is increasing, P must decrease. Perhaps I should have added the cap on V to the question, but I assumed it was known. | |
| Nov 20, 2014 at 21:03 | comment | added | Corvus | M is money supply, not money base. It is only the money base that is fixed. | |
| Nov 20, 2014 at 16:37 | comment | added | Alecos Papadopoulos | (+1) I was reading the question and was thinking "to show the fallacy one needs no more than the classical quantity theory of money" - and then your answer appeared on the screen... | |
| Nov 20, 2014 at 16:34 | history | answered | FooBar | CC BY-SA 3.0 |