Government Spending and Inflation. Part 1

re “Inflation is always and everywhere a monetary phenomenon.”
.    – – Milton Friedman1

Note:  An updated, expanded, and further edited version has been published here.

Nobel laureate Milton Friedman is considered to be the father of monetarism. This macroeconomic theory enjoyed popularity in the late 20th century but has come under increased criticism in the 21st century.  Monetary theory is deeply linked to arguments about the causes of inflation.  As shown here, there is little data to support Friedman’s theory that government spending generally causes inflation.  The issue is not as simple as he made it seem.


Milton Friedman, 1989. Credit: Encyclopedia Britannica.

Economics and Hoarding

Since the Great Financial Crisis of 2008, there have been headlines such as Europe banks hoarding ECB cash, threatening credit crunch (2012), Banks across Europe are considering taking a drastic step to avoid negative rates (2016), and Bank of America Clients Hoard Cash at Highest Level in Two Decades (2022).  This first became a problem in the US during the Dot.com Crash (2001) and the GFC – and then shifted to Europe. After all this time, we in America might have a more dispassionate view of the issue.  But the third reference above shows the problem of hoarding money persists.

 Where is economic theory about hoarding? Hoarding is nowhere to be seen in mainstream economics. Herein we discuss why.


Image credit: Pixabay, Public Domain.

How To Stop Inflation Cold

Over the years, I have written in many venues about the extreme importance of four economic rights and responsibilities and their transformation into four Concordian economic policies. My writings on this topic have consistently received the most readers, all over the world.

To my unending surprise, spurred by our immediate needs I have recently discovered
another major—major—ability of Concordian economics. Here it is: With the tools offered by
Concordian economics, we can stop inflation cold.

Let us see how.