Quote from: dr_nix on April 29, 2012, 10:43:33 AM

Quote from: blablahblah on April 28, 2012, 07:30:24 PM

All these massive requirements are built on top of the urban legend that a currency must grow (and shrink) to keep pace with an ill-defined concept of economic growth. What if a revolutionary new product or industry is created that transforms the economic landscape, thus changing the very definition of economic growth?

Can you elaborate on that? I don't get what you mean.

Keynesian economists seem to think that the money supply shouldn't just be inflated according to a blind formula without any regard for the size of the economy. As a crude example, if the economy grows by 10%, the money supply should (according to them) be increased as well so that the average price of a basket of goods (CPI) doesn't go down. However, there are a lot of problems which Keynesians seem to brush off as irrelevant. For example, who decides what goods should be eligible for CPI statistics? Similarly, who decides what criteria are allowed for determining the growth of the economy? What if cars (or some other important product group) go out of fashion and start skewing CPI results?

Hence, staying in control of all the information seems very complicated and labour-intensive, and for what? The holy grail of making sure that pizza/milk/shoe prices always stay the same? Prices keep creeping up forever anyway.