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A New Monetary Theory

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This video [2] from 1933 touts the virtues of inflation for ending the Great Depression. How will that work? When people see prices rising, they’ll buy now before the prices go up. That will stimulate aggregate demand and the multiplier will kick in. Really. That’s the argument. Along with some bizarre arguments along the way about high prices leading to higher incomes. Watch the video. It’s good for some laughs and illustrates how hard it is to keep multiples things in mind at the same time. Thanks to Walter Williams for the pointer.

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