Any competent banker would raise interest rates in response to stronger
than expected economic growth, because that indicates stronger than
expected demand for capital, usually without an equivalent increase in
the supply of capital.
>"The Incredible Bread Machine" is a fine reference on how the entire
>boom-and-bust cycle is intrinsic to government, not capitalism.
Given this book's reputation as a simple intro to libertarian
economics, I'm willing to believe it shows that government is often
a sufficient explanation for business cycles, but I will assume your
claim that it shows they wouldn't happen without government is a joke
unless you can give some hints about how it demonstrates that. Proving
the absence of a phenomenon can be pretty hard.
Does it provide historical examples of economies that were recession-
free due to the absence of government influence? Does it disprove
all of the hypothesized causes of business cycles that are independant
of governments (such as those described in Schumpeter's _Business Cycles_
or in Soros' _Alchemy of Finance_)?
sentience@pobox.com (Eliezer Yudkowsky) writes:
>They also point out that the inflation-vs.-unemployment curve is a
>simple fallacy;
It's a dangerous fallacy because it's half true - changes in the
inflation rate influence when umemployment happens.
the *only* thing that causes inflation is the government
>printing money.
I'm fairly sure I read a report of a major decline in the value
of a currency in Thucidytes (centuries before governments figured out
how to print money) - caused by a plague which convinced most people
that they wouldn't live long enough for saving money to be of any help.
>Capitalism is an inherently stable, symmetrical, self-organizing
>system. Nobody needs to build checks and balances into capitalism by
>coercive force; the checks and balances are there already. The law of
Capitalism has checks and balances which work almost perfectly in
the presence of perfect information, fail almost completely under
conditions of total ignorance. We operate under conditions which
are far from those extremes.
-- ------------------------------------------------------------------------ Peter McCluskey | | "Don't blame me. I voted pcm@rahul.net | http://www.rahul.net/pcm | for Kodos." - Homer Simpson pcm@quote.com | http://www.quote.com |