Friday, February 21, 2014

Multiplier effect?

Economists often say that creating inflation (printing money) has a "multiplier effect" in the economy and therefore it is good.

It is akin to saying that alcohol has a "multiplier effect" on my happiness and is therefore good for my happiness.

You see, it is unsustainable. Once the alcohol (and money printing) stops, the big hangover/ crash is inevitable.

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