The Adam Smith Institute
"The other reason is that inflation is eating into what pay rises people are getting, leaving them generally worse off. And (Friedman again) you can put that down to monetary policy. Like anything else, creating too much of the stuff just makes it worthless, and the MPC has created too much of the stuff. If overseas investors come to the same conclusion and sterling becomes devalued even further, the prices of many essential imports like food and fuel will rise even more, and UK consumers will feel themselves even worse off.
The solution? Hayek this time: inflation must be stopped dead. It is corrosive, and it stops markets from working properly. And if you want to get out of a recession, you need your markets to work as well as you can possibly make them. On that front, high taxes and bad regulations are bad enough, but inflation is a disaster. Present policies may just make things worse, rather than better."
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