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The reigning error: The crisis of world inflation
128 pages, Paperback
Published January 1, 1974
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October 26, 2022
I bought and read this book in the 1970s. Previously my local city newspaper had run a series of excerpts from it. It was published earlier than 1975, the hard cover.
It was my introduction to the explanation of money supply causing inflation. The US in 1971 had abandoned all its connection to the Gold Standard, and governments were eager to fund vast socialist projects like Medicare by just printing money. Inflation followed, then stagflation.
Rees-Mogg writes this in a Shakespearean style where there is a court case and he is explaining his points to a judge. Increasing the growth of the money supply causes inflation.
However he does not have an arithmetic formula to go with this.
Having an Economics degree I studied this further as the 70s went on and found that the percentage of inflation is simply equal to the money growth, with a time delay of about nine months. Now we say "other things being equal". Those other things are economic growth and the velocity of money circulation.
In Canada we were having money growth of 15% and inflation of 12%.
So this book is only an introduction to the subject.
It was my introduction to the explanation of money supply causing inflation. The US in 1971 had abandoned all its connection to the Gold Standard, and governments were eager to fund vast socialist projects like Medicare by just printing money. Inflation followed, then stagflation.
Rees-Mogg writes this in a Shakespearean style where there is a court case and he is explaining his points to a judge. Increasing the growth of the money supply causes inflation.
However he does not have an arithmetic formula to go with this.
Having an Economics degree I studied this further as the 70s went on and found that the percentage of inflation is simply equal to the money growth, with a time delay of about nine months. Now we say "other things being equal". Those other things are economic growth and the velocity of money circulation.
In Canada we were having money growth of 15% and inflation of 12%.
So this book is only an introduction to the subject.
Displaying 1 of 1 review