What Is the Optimal Growth Rate for the Money Supply?

What Is the Optimal Growth Rate for the Money Supply?
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Frank Shostak
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Commentary

It is widely held that a growing economy requires a growing money supply, because economic growth gives rise to a greater demand for money. It is also believed that failing to accommodate the increase in the demand for money, will lead to a decline in the prices of goods and services. This, in turn, could destabilize the economy and produce an economic recession or depression.

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.