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Can Money Supply Growth Cause Economic Growth?

Can Money Supply Growth Cause Economic Growth?
A one dollar chrome printing plate bearing the signatures of U.S. Secretary of Treasury Paul O'Neill and U.S. Treasurer Rosario Marin on Nov. 21, 2001, during a tour of the Bureau of Engraving and Printing in Washington, D.C. Shawn Thew/AFP via Getty Images
Frank Shostak
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Commentary

Most economic commentators are of the view that when an economy is starting to experience difficult times, the central bank should provide support to the economy by means of large increases in money supply. These increases are expected to strengthen economic growth through the strengthening of individuals’ demand for goods and services.

Frank Shostak
Frank Shostak
Author
Frank Shostak, Ph.D., is an associated scholar of the Mises Institute. His consulting firm, Applied Austrian School Economics, provides in-depth assessments and reports of financial markets and global economies. He has taught at the University of Pretoria and the Graduate Business School at Witwatersrand University.