Reply To: Some questions


I’m sorry, I forgot to link the article.

The article states that, atleast what I got from it, is that, when the demand for money rises, the price of all inputs in the economy fall. When demand shifts from land lines to cell phones, the input prices of the land lines falls relative to the increase of prices of the inputs to cell phones, because the price of outputs change relatively the same. When money demand increases, however, the input and output prices of everything else falls, and the input prices for money falls, so resources must necessarily flow into money creation. Therefore, that spread between input and output of everything else in the economy must widen in order to “shrink” or reduce the spread of the inputs and outputs to money creation. Correct me if I am wrong please.