How Does the Government Control The Supply of Money?
Tuesday September 2, 2003
I've been getting quite a few e-mails lately. Keep 'em coming!
I was just asked the following: "How does the government control the supply of money and is there a period when government fails to control the supply of money?"
To get the answer to the first part of the question, please see "Expansionary Monetary Policy vs. Contractionary Monetary Policy".
I've never really thought about the second part of your question. It would seem to me that the only difference would be that government (or more precisely, the central bank) wouldn't enagage in the three policies outlined in the article. Of course, if you talk to someone interested in Austrian Economics, they'd tell you that it is preposterous to claim that the government can control the money supply.
If you have a question you cannot find answered on the site, please e-mail me using the feedback form and I'll try my best to answer it for you.
I was just asked the following: "How does the government control the supply of money and is there a period when government fails to control the supply of money?"
To get the answer to the first part of the question, please see "Expansionary Monetary Policy vs. Contractionary Monetary Policy".
I've never really thought about the second part of your question. It would seem to me that the only difference would be that government (or more precisely, the central bank) wouldn't enagage in the three policies outlined in the article. Of course, if you talk to someone interested in Austrian Economics, they'd tell you that it is preposterous to claim that the government can control the money supply.
If you have a question you cannot find answered on the site, please e-mail me using the feedback form and I'll try my best to answer it for you.
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