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47 sats \ 6 replies \ @SimpleStacker 24 Sep \ parent \ on: Our Economy Has Never Needed an "Elastic" Currency econ
I think a good way to put it would be to say
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fiat standard gives more flexibility to respond to shocks in the short term, but creates incentive problems that can lead to worse ex ante outcomes
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commodity money has less flexibility to respond to short term shocks, but has a better incentive structure which could lead to better outcomes in the long run
So it can be pitched as a sort of commitment / time consistency problem
Maybe monetary economists already knew this and I'm just regurgitating first year grad school stuff haha
There might be people who would put it that way. I think the first point needs to be amended with something like "...but no one has sufficient information to respond to shocks in a beneficial way."
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Unless the objective is to pretend you're doing something in response to political pressure, (but what you're really doing is handing out favors to the wealthy), and subsequently to be fellated for your brilliance in the corporate media
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Is that what a benevolent social planner would do, though?
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Indeed, our current benevolent social planners verify their own benevolence by the amount of fellating by Paul Krugman they receive.
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Imagine writing out that objective function
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It would make for an entertaining PhD thesis, at the very least
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