![]() ![]() ![]() Given the steady growth in productivity of the last 100 years, the world economy is now grossly under-stimulated and in danger of precipitous deflation. Since productivity is a "rate" of production, even a one time increase requires a corresponding permanent increase not in the money supply itself, but in the "rate of increase" of the money supply. This leveraged difference in returns is the equity premium. Businesses leverage low interest rates enforced by the monetary agent to increase their activity, and growth rates, increasing employment to compensate for the reduced labor necessary to create the former level of goods and services. The monetary agent's power is similar to or greater than investor power in the market. The monetary agent (central banker) is a market participant who is not profit oriented and can create money at will, and thus not be subject to rational investor constraints. The book presents a theory of necessity to adjust money supply to account for productivity if deflation is to be avoided. Full text eBook in PDF formatted for 7 inch or 10 inch screen, for students and researchers. ![]()
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