This is...it's...I mean...ah, what's the use?
https://twitter.com/bitstein/status/1384332775461957635
Still I'll try: monetary expansion DOES create wealth when it prevents what would otherwise be a shortage of exchange media. Such a shortage can result in recession and unemployment. That is, it can destroy wealth. Monetary expansion adds to wealth by preventing that outcome.
Economists of practically all schools have long understood this exception to the rule that monetary expansion only causes inflation. I mean economists going back to G. Poulett Scrope and John Stuart Mill! It is not just a "Keynesian" idea, though he shared it.
(Keynes himself was no inflationist, by the way. The contrary claim is another piece of cut-rate-Austrian-econ-balderdash.) You can't understand many historical economic crises, including the recent ones, without recognizing the possibility of money shortages...
... and the capacity of monetary easing to alleviate them. Of course this is seldom the whole story; and excessive monetary expansion has contributed to crises as well. But one needn't choose between these causes, as certain tin-foil hat Austrians would have people believe.
It's a shame that so much bad monetary economics is marching under the Austrian economics banner. FWIW: I think Mises' *Theory of Money and Credit* one of the greatest works in the field. He was a great monetary economist. The same can't be said for many self-styled Misesians.
@dandolfa @Frances_Coppola @DavidBeckworth @MacRoweNick @PeterContiBrown @BadEconTakes @vtg2 @sghorwitz @WilliamJLuther @lawrencehwhite1 @norbertjmichel @RameshPonnuru @rcwhalen @sam_a_bell @TheStalwart
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