----------------- HES POSTING ----------------- Larry Moss wrote: << The basic pattern is well-known to economists. The inflationary process proceeds always in a political context with parties and interest groups who may understand the redistributive effects of inflation and still hope to gain wealth or status by supporting the process. One dimension of the revolution on modern economic thought especially surrounding the public choice school has been to emphasize this political process. In Argentina's case the story that needs to be told would be less about a maverick central bankers extending credit and more about a government trying to provide social programs to stay in power. << In the traditional literature, some Austrians have touched upon this important process and, to some extent, the politics behind new money. Both Hayek and Von Mises, for example, have discussed the uneven and stepwise nature of the inflation process and have, to a very limited extent, touched upon the politics behind new money. Unfortunately, most eminent QTM [Quantity Theory of Money] proponents, such as Irving Fisher, have really preferred to focused mostly on what would constitute the structure of a comprehensive price level and how could it best be measured and have mostly ignored the political and institutional aspects which precede the creation of new money. It should be noted that Fisher, however, in his PPM [Purchasing Power of Money, 1911], did outline the asymmetrical nature of the adjustment in interest rates to new money and how this part of the process contributes to swings in the business "cycle." And, also Robertson in his discussions on forced saving, touched upon the stepwise process of new money and inflation, but again, like Fisher, had no interest in really going ahead of the process to explore the political culture around new money. Laurence's last sentence above, I think, really encapsulates the contemporary political climate surrounding the call for the new "Argentino." There has been no mention in the press about how the Argentinoes will get into circulation. It seems the government prefers it to be a mystery. Chas ------------ FOOTER TO HES POSTING ------------ For information, send the message "info HES" to [log in to unmask]