Jim > if the supply of goods and services isn't inelastic, an increase in > the amount of money (or rather, money times velocity) would increase > real production.
Yes! And this would increase income. But, this is an "indirect" income generation, through the creation of money by lending/borrowing. Of course, we are assuming inelasticity of supply. Put differently, prices do not go up much so the output goes up. What I am talking about is the creation of "income" out of thin air because both the "right" and the left" legs of a transaction eventually end up in the asset sides of the balance sheets of two counter-parties. Is this not a "direct" _income_ creation out of thin air? Sabri _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
