The Economic Function of Inflation Is to Lower the Real Value of Wealth Assets Sufficiently to Pay for the Government’s Excess Spending Monetized by the Federal Reserve

Authors

Vernon L. Smith, Chapman UniversityFollow

Document Type

Article

Publication Date

Summer 2024

Abstract

The lengthy title of Nobel-laureate Vernon Smith aptly captures a reality that too many economists, policy makers, and bewildered voters fail to grasp: The economic function of inflation is to lower the real value of wealth assets sufficiently to pay for the government's excess spending monetized by the Federal Reserve.

Comments

This article was originally published in The Independent Review, volume 29, issue 1, in 2024.

Recommended Citation

Smith, V. L. (2024, Summer). The economic function of inflation is to lower the real value of wealth assets sufficiently to pay for the government’s excess spending monetized by the Federal Reserve. The Independent Review, 29(1), 147-150.

Copyright

The Independent Review