"Now, the thing about Schiff and all the other Austrians predicting runaway inflation is that they were right to make this prediction given their model. If you believe that a recession is caused by a failure on the production side of the economy, the result of past malinvestment or something, you should also believe that any attempt to correct this decline by expanding credit will simply result in too much money chasing too few goods, and hence a lot of inflation."It seems to me the answer is ambiguous or at least depends on what you consider "Austrian theory" and what you consider to be some auxiliary take on the quantity theory (which is obviously a lot bigger than Austrian economics).
Monday, December 31, 2012
Posted by dkuehn at 12:39 PM
HT John Carney (Krugman writes it here) -