Production Theory

The heart of economic growth is the expansion of real savings. Monetary pumping only destroys wealth and savings.

The heart of economic growth is the expansion of real savings. Monetary pumping only destroys wealth and savings.

The real problem with inflation, properly understood is that it is essentially a wealth transfer away from the most productive parts of the economy. This causes bubbles and economic fragility.

The real problem with inflation, properly understood is that it is essentially a wealth transfer away from the most productive parts of the economy. This causes bubbles and economic fragility.

Some claim "the rich" will be fine—or even better off—after the COVID panic destroys the economy for most of us. But there's a problem: the wealthy depend heavily on an economy fueled by the production and consumption of all workers and entrepreneurs.

Thanks to past interventions, the economy is now rife with malinvestments and prices that don't reflect real demand. The solution is to allow deflation and other types of painful readjustment. Otherwise true growth will elude us.

Reswitching indicates that the average production period is not necessarily a decreasing function of the interest rate. Granot's generic model of the structure of production shows behavior resembling reswitching.

Thanks to past interventions, the economy is now rife with malinvestments and prices that don't reflect real demand. The solution is to allow deflation and other types of painful readjustment. Otherwise true growth will elude us.

Central banks have decided that one of their main missions is to prevent deflation. But this only ends up causing the malinvestments that lead to economic busts.