If you’re confused about the arguments that have been floating around about inflation, economic growth, and prosperity in general, I recommend this post over on econlog. This is part of an ongoing review of Murray Rothbard’s “For a New Liberty” published back in 1978 (available online at The Mises Institute BTW). You can get concise critique of the suddenly popular Keynesian approach to economics plus a critique of that critique. The Austrian business cycle theory is explained pretty well and I think that is a service in and of itself. I wonder when people are going to rediscover this theory that as been right over and over again…
Some of the review is a bit dense, but once you get into the body it goes pretty smoothly. I find that the comments are especially educational. Caplan quotes tyler Cowen (from marginal revolution), someone that I normally bow down to. But in this case, it doesn’t make much sense to me. There is a devastating critique of Cowan’s “banana” theory in the comments. This is good stuff and fairly approachable.
Austrian business cycle theory has been prover correct over and over again in the past. It is currently predicting a substantial inflation to come from the government’s actions. Ignore it at your own risk…