The economics profession is captive to endless fallacies, but arguably the most ridiculous of them is the idea that money creation instigates economic growth. As a consequence, politicians and mystical economists have focused endlessly on “the Ms” and other money measures over the years; the belief being that that a planned increase of the various monetary aggregates care of central banks would result in a specific GDP outcome. Reducing “monetarism” to its absurd basics, the recipe for economic growth is “just add dollars.”
The problem is that the view is backwards. Where there’s production there’s never a lack of money. As opposed to money instigating production, it’s in truth a consequence of it. Put another way, Banco Central de Venezuela (Venezuela’s Central Bank) could produce endless bolivars (or very few) with little economic result. Since bolivars aren’t trusted by actual producers of goods and services, their existence is of little relevance to actual economic growth.
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