Say’s Law, monetary growth and the absence of inflation

At about 11:15 he actually brings Say’s Law into it, and this comes almost a minute after he bags Keynesian economics (around 10:25). The problem remains how difficult it is to keep track of the real side of the economy at the same time as you are trying to keep track of the money side. There are the real goods and services which are limited and finite and the amount of purchasing power that can be expanded forever.

The question that really does require a proper answer is why has there been no major increase in the growth in consumer prices even though there have apparently been massive increases in the amount of money.

It’s partly the way money has been kept from flowing into the economy generally, it is partly because we can produce standard goods and services more cheaply, it is partly because inflation has affected various products that do not enter into the CPI such as share prices, it is partly because the economy is do dead and it is partly because labour cost growth is so low.

[Spotted by Turtle of WA in the Catallaxy comments thread.]

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