In this conference, Richard Ebeling, PhD, describes how monetary policy is still hunted by the ghost of the Great Depression. He explains the meaning of deflation and its negative effects in economy, and identifies three causal factors of this economic problem: Supply side deflation, price wage rigidity deflation and monetary deflation. Dr. Ebeling comments on scarcity, what it means to society, and also mentions other social troubles such as goods oversupply, prices getting too high and people asking for major wages. He mentions that the hubris of central bankers can be seen in their failure to realize that it has been their own monetary policies which have created economic problems, and finally, he explains that the appeal of social engineering remains too strong.
Richard Ebeling
Richard Ebeling is a defender of free markets and limited government. He was president of the Foundation of Economic Education (FEE), Ludwig von Mises professor of Economics at Hillsdale College, Michigan and vice president of academic affairs in The Future of Freedom Foundation. Ebeling holds a PhD from Middlesex University in London, an MA from Rutgers University, and a BA in Economics from California State University. He and his wife, Anna Ebeling discovered the lost papers of Ludwig von Mises and edited the papers Selected Writings of Ludwig von Mises, published by Liberty Fund.
The Hubris of the Central Banker: Depression, Deflation and the Current Economic Crisis Richard Ebeling
Universidad Francisco Marroquín
Guatemala, March 4th 2003
A New Media - UFM production. Guatemala, August 2008 Camera: Rebeca Zuñiga; editing/ encoding: Jose Cordón; index: Inés Zúñiga; publication: Fernando De León; content reviser: Sofía Porres
This work is licensed under a Creative Commons 3.0 License Este trabajo ha sido registrado con una licencia Creative Commons 3.0
Content
Introduction
Deflation
What is deflation?
Negative consequences of deflation
Causal factors behind a general fall of prices
Supply side deflation
Price wage rigidity deflation
Monetary deflation
Arguments and statements of central banks
The central bank's meaning of deflation
Reserves
Price stability as low inflation
Overoptimism
Hayek argued...:
Unbalance between savings and investment
Pricing out of market
Central bank stimulates additional private sector investment
Continuous hubris: "central bank's failure"
Otmar Issing
An opinion:
The hubris of the central bank can't be given up
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